The Pound Sterling to Canadian Dollar (GBP/CAD) exchange lost ground toward the close of Tuesday’s session before the Bank of Canada (BOC) interest rate decision and Markit’s UK Composite and Services Purchasing Managers Index (PMI).
If Markit’s reports record a rise as economists’ have forecast, the Pound could climb against other currency majors.
Earlier in the session… The Pound sterling to Canadian Dollar (GBP/CAD) exchange rate retained gains in the second half of Tuesday’s session despite oil prices recovering slightly.
Industry expert Kyle Cooper commented: ‘Today’s a little bit more of a rebound from Friday’s plastering. We got [to five-year lows] really quick, and it’s not an entirely bad thing to take some profits.’
The tone of the Bank of Canada announcement on Wednesday could see the ‘Loonie’ exchange rate rise or fall.
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate continued its bullish path on Tuesday ahead of the Bank of Canada’s (BOC) interest rate announcement on Wednesday.
However, Reuter’s latest poll suggested that interest rate hikes won’t materialise as soon as some had expected. Despite inflation residing above the BOC target, Reuters believe a rise in the official cash rate isn’t likely to occur until the later half of 2015–pushed back from the initial May forecast.
Economist Benjamin Reitzes stated: ‘Things would have to be going exceptionally well for [Bank of Canada policy makers] to go in May–exceptionally well.’
Canadian Manufacturing Index Offers Some ‘Loonie’ Exchange Rate Stability
In Monday’s session… The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate retained gains in the second half of the European session after the Canadian Manufacturing Index remained sturdy in November at 55.3. The RBC data showed a jump in exports which reached their highest level in over 12 months.
RBC stated:’ New export orders recorded a strong jump in the months, pointing to continued support from a stronger US economy and a more competitive Canadian Dollar.’
Earlier in the session… The Pound Sterling to Canadian Dollar (GBP/CAD) rallied higher during Monday’s European session after the UK saw favourable figures by way of Markit’s Manufacturing Purchasing Managers Index (PM).
The ecostat showed that the manufacturing sector expanded in November, rather than contracting like economists’ had first forecast.
The Markit report read: ‘Although slower than in the first half of the year, the expansions in manufacturing production and new business remained broad-based. November saw output and new orders increase in the consumer, intermediate and investment goods sectors and also across SMEs and large sized companies.’
Oil Prices Pressure the Canadian Dollar Exchange Rate Lower
Earlier in the session… The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate recorded modest gains on Monday after oil prices slid lower.
The value of oil dropped below $65 a barrel hitting a four-year low following last week’s OPEC meeting which saw members refuse to cut oil production levels despite falling prices. Strategist Michael McCarthy commented: ‘It’s likley that this pressure will remain on prices until there are signs of some shutdowns.’
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate experienced an extremely eventful week when the price of oil dropped as a result of the Organisation of the Petroleum Exporting Countries (OPEC) meeting.
The meeting has seen huge fluctuations in many currencies – as the price of oil dropped, so did the value of other commodities which dragged exchange rates down with them.
GBP/CAD Exchange Rate Mixed
However, Friday saw a silver lining for the Canadian Dollar when the Quarterly Gross Domestic Product (GDP) figures exceeded economists’ expectations. With evidence that the Canadian economy grew at a faster than forecast pace, the ‘Loonie’ was offered a glimmer of hope. The third quarter grew by 2.8% after Q2’s 3.6% and the predicted 2.1%.
But not everyone has been optimistic about the release. Scotiabank commented: ‘Note that while this is a solid growth figure, this is still underperformance relative to the US.’
The oil price is likely to continue to weigh on the Canadian commodity currency going into next week, despite any favourable data. Economist at Bank of Montréal, Doug Porter, stated: ‘Does it get any better than this? Sadly, probably not. Even with this nice run, we suspect the Bank of Canada will be completely unmoved because of one word – oil.’
However, the week ahead may offer some hope for the Canadian Dollar when Canadian Manufacturing Purchasing Managers Index (PMI) figures are released. Wednesday could be a highly influential day for the Canadian Dollar exchange rate when the Bank of Canada (BOC) reveals its latest interest rate decision.
Thursday’s Ivey Purchasing Managers Index could give the Canadian Dollar a boost if it rises from 51.2 to 53. Net Change in Employment and Unemployment Rate ecostats are out on Friday which are another event of influence for Canada on Friday.
Pound Sterling to Canadian Dollar Exchange Rate Forecast to Fall
The Pound Sterling exchange rate could be impacted on Thursday when the Bank of England (BoE) releases its interest rate decision. The central bank is unlikely to move its interest rate; however, the effect of the event could cause Pound movement.
Friday’s BoE 12-month inflation expectations could also see major Pound movement. In recent weeks the Pound has dipped when the Bank of England (BoE) Governor Mark Carney suggested that the UK inflation levels could fall below 1.0% temporarily.
In addition to the above events, any global developments or changes to commodity prices could also see the Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate fluctuate.
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate is currently trading at 1.78595.
The Canadian Dollar to Pound Sterling (CAD/GBP) exchange rate is currently trading at 0.559925.
Canadian Dollar (CAD) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Pound Sterling,
,Canadian Dollar , 1.7941,
US Dollar,,Canadian Dollar , 1.1411,
Euro,,Canadian Dollar , 1.4225,
Australian Dollar,,Canadian Dollar , 0.9681,
New Zealand Dollar,,Canadian Dollar , 0.8961,
[/table]
