The Canadian Dollar to Pound Sterling exchange rate was trading close to its highest level in three months on Tuesday as the UK currency continued to be weighed upon by disappointing inflation data supported the ‘Loonie’.
CAD/GBP exchange rate is currently trading in the region of 0.551 just off the 0.551 figure seen in May.
An improved outlook for geopolitical events supported the Canadian Dollar to see it make small gains against a number of peers including the Euro.
Concerns over the crisis in Ukraine and the conflict in Iraq eased slightly on Tuesday. Russian Foreign Minister Sergey Lavrov said that issues regarding a Moscow led aid convoy destined for Eastern Ukraine had been resolved following negotiations with representatives from Ukraine, Germany and France.
In Iraq Kurdish and Iraqi government, forces in conjunction with US warplanes recaptured a strategically vital dam in the north of the country as the fight back against the Jihadist Islamic State gains momentum.
News in Gaza however was not as positive however after the Israeli military launched an airstrike in retaliation to Hamas fighter launching a rocket into Israel.
The fresh bout of violence comes just hours before the ending of a five-day long ceasefire. Investors will be watching to see whether the conflict will resume in earnest.
Since July 8 more than 2000 people have died in the fighting.
The Pound meanwhile was weaker against all of its major peers on Tuesday after data showed that the UK’s annual inflation rate eased more than expected in July, giving the Bank of England more room to leave interest rates at record low levels.
According to the Office for National Statistics, inflation in the UK fell from 1.9% to 1.6%, below expectations for a dip to 1.8%.
Sterling declined as investors pared back their expectations for interest rates to rise before the end of the year.
‘The Monetary Policy Commitee (MPC) can afford to leave monetary policy quite loose while inflation pressures are extremely weak. We continue to expect the committee to be surprised by weak inflation over the coming months,’ said Samuel Tombs, an economist at Capital Economics Ltd.
Pound Sterling to Canadian Dollar (GBP/CAD) Exchange Rate Forecast
The Pound is forecast to remain under pressure against most of its major peers until Thursday as the latest retail sales data could offer the currency some support if it comes in strongly and shows that the UK economy is continuing to strengthen.
Wednesday’s Bank of England minutes could create some volatility if they show that a number of MPC members called for or were considering voting for an interest rate increase.
If the minutes show that all Committee members were all for keeping rates low than Sterling could weaken, further.
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,0.5509 ,
Canadian Dollar,,US Dollar,0.9163 ,
Canadian Dollar,,Euro,0.6877 ,
Canadian Dollar,,Australian Dollar,0.9824,
Canadian Dollar,,New Zealand Dollar,1.0834 ,
US Dollar,,Canadian Dollar,1.0911 ,
Pound Sterling,,Canadian Dollar,1.8135 ,
Euro,,Canadian Dollar,1.4539 ,
Australian Dollar,,Canadian Dollar,1.0175 ,
New Zealand Dollar,,Canadian Dollar,0.9208 ,
[/table]
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