With a lack of domestic data the Pound has experienced minimal movement against the majority of its most traded currency peers. Sterling has strengthened, however, against the ‘Loonie’ (CAD) which has suffered from a combination of commodity price cuts and a bullish US Dollar.
The Pound Sterling to Canadian Dollar exchange rate is currently trending in the region of 1.7990.
Sterling had lost quite a bit of ground over the course of last week in the build up to the Scottish independence referendum. A succession of confusing polls, which showed different results and the lead changing hands several times, amped up trader anxieties and caused the Pound to soften across the board.
Friday morning saw a reversal in fortune for the British Pound after the results from the aforementioned Scottish referendum showed the Unionists to have been victorious. This eased pressures on issues surrounding a shared currency and national debt. Sterling softened towards the end of the London session, however, as increased demand created some attractive selling positions and traders opted to lock in their profits.
Those invested in the Canadian Dollar would have been buoyed by the impressive set of Canadian data on Friday. The Consumer Price Index stayed in line with the previous figure of 2.1%, and the Core Consumer Price Index increased beyond the market consensus of 1.8%; having risen to 2.1% from the previous figure of 1.7%.
The Pound Sterling to Canadian Dollar exchange rate has hit a low today of 1.7852.
An absence of economic data on Monday has seen the Pound experience relatively little movement against the majority of its competitors. A slight softening can be attributed to fresh concerns over Scottish devolution. In the panic of the build up to the referendum Prime Minister David Cameron offered Scotland much more power over their domestic affairs in order to entice Nationalists back into favouring the union. With little known about the impact of Scottish devolution on the Pound; many traders have pulled out of Sterling until muddy waters gain more clarity.
The ‘Loonie’ has trended lower against the majority of its rivals with a combination of commodity price cuts and US Dollar bullishness. The massive declination in the price of crude oil has had a particularly negative effect on commodity-correlated currencies such as the Canadian Dollar. The Canadian economy has also struggled against the backlash of dramatically soft demand for gold which has declined to an 8-month low.
A surge in demand for the US Dollar has dampened the appeal of the US-sensitive Canadian Dollar. The Federal Reserve’s most recent monetary policy meeting gave a more hawkish outlook in terms of the timing of benchmark rate revisions. This has tempted traders into making long-term investments with the hope of large profits from a rate hike in early 2015.
The Pound Sterling to Canadian Dollar exchange rate has reached a high today of 1.7992.
UPDATE
The Pound Sterling to Canadian Dollar exchange rate is currently trending in the region of 1.7999.
Having struggled against a bullish US Dollar and rapidly declining commodity prices; the Canadian Dollar has recovered some of its losses against the Pound after Chinese data initiates a commodity price recovery.
The HSBC Chinese Manufacturing PMI was forecast to fall to the 50.0 mark which separates growth from contraction. However, the actual data was an unexpected rise to 50.5 from 50.2. The immediate effect of this improved Chinese factory output was a rise in commodity prices, and the recovery of many emerging market currencies.
