The Canadian Dollar (CAD) exchange rate recovered some lost ground against the Pound (GBP) on Thursday after the UK currency was weakened by a softer than forecast retail sales report and as commodity prices and improved data out of China buoyed commodity based assets.
Wednesday’s terrorist incident in Ottawa in which a Canadian soldier guarding a war memorial was shot dead by a convert to extremist Islam shocked the world.
The gunman in turn was killed by security forces after a shootout in the main legislature building. The incident follows the murder of another Canadian solider two days ago near Montreal.
It is suspected that the incidents are in retaliation for the Canadian Parliament approving the launching of airstrikes against the self-proclaimed Islamic State, which has terrorised large swathes of territory in Iraq and Syria.
‘Canada will never be intimidated. We will learn more about the terrorist and any accomplices he may have had,’ said Canadian Prime Minister Stephen Harper in a televised address last night. The incident briefly weighed on the ‘Loonie’ but had no lasting negative impact upon the currency.
On Thursday, the Canadian Dollar strengthened against the Pound and other peers after the release of positive manufacturing purchasing manager’s index data out of the Eurozone and China. The data eased concerns over a global slowdown and increased demand for riskier commodity based assets.
Markit’s composite purchasing managers index (PMI), for the Eurozone increased to 52.2 points in October from the figure of 52.0 recorded in September. A figure above 50 indicates expansion whilst a figure below indicates contraction.
The data was stronger than economists had been expecting.
Data out of China also came in better than forecast. The HSBC preliminary Chinese manufacturing PMI increased to a reading of 50.4 from 50.2 in September, easing concerns of a slowdown occurring in the world’s second largest economy.
The Canadian Dollar also received support from a rise in the price of crude oil. The commodity is Canada’s most traded export, so any improvement in prices following the recent sharp declines is a positive for Canada.
Retail Sales weigh on Pound
The Pound continued to be under pressure against most of its major peers as retail sales data came in below analyst forecasts.
According to the London, based Office for National Statistics (ONS) UK retail sales fell by 0.3% last month, below forecasts for a decline of 0.1%. Year-on-year retail sales rose at a rate of 2.7% in September, below forecasts for a 2.8% gain.
UPDATE
The Canadian Dollar to Pound Sterling exchange rate is currently trending in the region of 0.5560.
As traders await the British Gross Domestic Product data, the Pound is holding its ground against nearly all of its most traded currency peers. Quarterly third-quarter Gross Domestic Product is forecast to drop from 0.9% to 0.7%. On a yearly basis, the GDP is expected to show growth of 3.0%, down from the 3.2% growth registered in the third quarter last year.
Meanwhile, the Canadian Dollar has been relatively unmoved against the majority of its competitors due to a lack of data.
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,0.5551 ,
Canadian Dollar,,US Dollar,0.8895 ,
Canadian Dollar,,Euro,0.7035 ,
Canadian Dollar,,Australian Dollar,1.0153,
Canadian Dollar,,New Zealand Dollar,1.1357 ,
US Dollar,,Canadian Dollar,1.1241 ,
Pound Sterling,,Canadian Dollar,1.8012 ,
Euro,,Canadian Dollar,1.4214 ,
Australian Dollar,,Canadian Dollar,0.9851 ,
New Zealand Dollar,,Canadian Dollar,0.8805 ,
[/table]
