On Friday the Canadian Dollar shed 0.50 per cent against the Pound in response to disappointing Canadian growth data.
Canada posted weaker than expected first quarter growth as a result of contracting household/business/government spending.
While quarterly growth of 1.8 per cent had been anticipated, Canada only managed quarter-on-quarter expansion of 1.2 per cent.
This was the slowest pace of expansion since the nation was in recession in 2009.
The ‘Loonie’ posted widespread declines after the report was published and held losses over the weekend.
The commodity-driven Canadian Dollar even failed to advance after China published an unexpectedly upbeat manufacturing report.
However, the Pound’s advance against the Canadian Dollar was slightly limited on Monday as a UK report showed a steep decline in UK mortgage approvals.
Approvals had been expected to decline from 67,100 in March to 64,500 in April, but they actually slipped to 62,900 as lending conditions tightened.
Market Analyst Eimear Daly stated; ‘The market is crowded with long sterling positions and any weakness in data will encourage some profit taking. But the temporary pause doesn’t change our view that the UK has a robust economic recovery and that the Bank of England will probably be the first major central bank to raise rates.’
The UK’s manufacturing PMI showed that the pace of expansion slowed slightly in April, but that output and new orders experienced strong expansion.
A lack of Canadian data is likely to restrain movement in the GBP to CAD pairing as the day continues.
Both the Bank of England and Bank of Canada are due to deliver their rate decisions this week.
Neither central bank is expected to make any alterations to fiscal policy.
Over the next few days volatility in the Pound to Canadian Dollar exchange rate could be sparked by UK construction and services PMI and Canada’s Ivey purchasing managers index.
Global developments, including Friday’s highly influential US non-farm payrolls report, could also have an impact on the GBP/CAD pairing.
Canada is scheduled to publish its own employment figures on Friday. The nation’s economy is expected to have added 21,500 positions in May after losing 28,900 positions in April.
Canadian Dollar (CAD) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Canadian Dollar,
,Pound Sterling,0.5500,
Canadian Dollar,,US Dollar,0.9212,
Canadian Dollar,,Euro,0.6774,
Canadian Dollar,,Australian Dollar,0.9950,
Canadian Dollar,,New Zealand Dollar,1.0854,
US Dollar,,Canadian Dollar ,1.0854,
Pound Sterling,,Canadian Dollar,1.8193,
Euro,,Canadian Dollar,1.4763,
Australian Dollar,,Canadian Dollar,1.0051,
New Zealand Dollar,,Canadian Dollar,0.9295,
[/table]
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