A combination of a softening US Dollar and disappointing Canadian Gross Domestic Product data has caused the Pound to Canadian Dollar exchange rate to surge close to a fresh weekly high. A revision to the British second-quarter GDP has enabled Sterling to claw back some of the losses from Monday’s less-than-impressive set of economic publications.
The Pound Sterling to Canadian Dollar exchange rate is currently trending in the region of 1.8133.
Having started Monday’s session in a strong position following a hawkish speech given by Bank of England Governor Mark Carney, Sterling lost ground after domestic data printed disappointingly. The BoE Consumer Credit declined from £1.108 billion to £0.898 billion, Mortgage Lending dropped from £2.34 billion to £2.28 billion and Mortgage Approvals cooled from 66, 100 to 64, 210 despite the market consensus of an increase to 69, 000.
With a complete absence of economic data since last Tuesday the Canadian Dollar has had little reason to gain momentum and has generally trended slightly lower as the days went on. Any huge declination, however, was curtailed by a bullish US Dollar as the ‘Loonie’ (CAD) tracked its progress.
The Pound Sterling to Canadian Dollar exchange rate has hit a low today of 1.8065.
Despite mixed data on Tuesday the Pound has generally trended higher against the majority of its most traded currency competitors. The GfK Consumer Confidence Survey was forecast to dip fractionally from 1 to 0, but the actual result showed a contraction to -1.
However, the poor consumer confidence data was overshadowed by a positive revision to second-quarter Gross Domestic Product. Having come in at 0.8% previously, the new revised figure hit 0.9%.
Having waited a long time for some fresh economic data, those invested in the Canadian Dollar would have been extremely disappointed to see Tuesday’s results. Yearly Gross Domestic Product was forecast to decline from 3.1% to 2.8%, but the actual result declined to 2.5%.
A softer US Dollar has also aided the ‘Loonie’ downtrend. Traders have over purchased the US Dollar amid speculation that the Federal Reserve will hike rates in 2015. Now economists are realising that the surge in demand wasn’t warranted by ecostats, and the US Dollar has softened slightly as a result.
Forecast for the Pound Sterling to Canadian Dollar Exchange Rate
Both the UK and Canada have only one domestic data publication on Wednesday and both of similar economic weighting. The UK Manufacturing PMI and the Canadian Manufacturing PMI have the potential to spark changes in the GBP/CAD currency pairing.
The Pound Sterling to Canadian Dollar exchange rate has reached a high today of 1.8141.
Update –
The Pound Sterling to Canadian Dollar exchange rate is likely to hold onto gains gained on Tuesday as investors see the Canadian economy struggling to keep up with its US neighbour.
Tuesday’s GDP data showed that the nation’s economy expanded at a rate of 2.5% in July, lower than expectations for an annual growth figure of 2.8% and was a drop from the preceding month’s figure of 3.1%.
Falling oil and commodity prices are also weighing upon the ‘Loonie’.
The latest Canadian Manufacturing PMI report could offer some support if it comes in better than expected.
