Earlier in Wednesday’s session the Canadian Dollar (CAD) to Pound (GBP) exchange rate was broadly lower as the Bank of England’s policy meeting minutes offered support to the UK currency however, as the session continued the ‘Loonie’ recovered some ground on positive Wholesale sales data.
The Pound was trading in the region of 1.8221 against the Canadian Dollar
Sterling strengthened broadly against the majority of its most traded peers after the minutes from the Bank of England’s latest policy meeting showed that two out of nine members of its Monetary Policy Committee voted in favour of raising interest rates.
As a result, traders increased their bets for a rate rise occurring before the end of the year.
‘The vote shows that the Bank of England is gradually moving towards raising interest rates, Clearly the minutes are more hawkish than the quarterly inflation report, so that is providing some support for the Pound today,’ said foreign exchange strategist Lee Hardman.
The minutes took the markets by surprise as most economists had been expecting another unanimous vote in favour of keeping interest rates on hold at 0.5%.
According to the minutes, the two dissenting MPC members said the state of the economy justified an immediate rise in the bank rate.
The Canadian Dollar managed to claw back some ground against the Pound after data showed that Wholesale sales in the North American country increased for a third consecutive month in June.
According to Statistics Canada, wholesale sales increased by 0.6% to C$53.0 billion, a slower pace than the 1.3% rise expected by economists.
Wholesale sales for May were revised up to a 2.3% an increase from a previously reported gain of 2.2%.
Pound to Canadian Dollar (GBP/CAD) Exchange Rate
The Pound is forecast to hold on to gains against the Canadian Dollar on Thursday due to a lack of market moving domestic data out of the North American nation and the latest UK Retail Sales are due for publication.
The next major data release due for the ‘Loonie’ is published on Friday when the latest inflation and retail sales data is released. Economists are widely forecast that inflation eased on a monthly basis whilst retail sales also eased.
On an annual basis, however sales are expected to have risen.
Canadian Dollar to Pound Sterling (CAD/GBP) Exchange Rate Gains from Pedestrian UK Retail Sales
This morning’s release of UK Retail Sales data has seen the Pound fall versus the majority of its peers, although the drop is minimal at present.
Year-on-year UK Retail Sales failed to register as much growth as anticipated; having only increased by 3.4%. This is in spite of the fact that retail sales showed positive growth in July. The impact of the data has seen the Pound file losses versus many of the majors, but the retraction is currently minimal. This could be because of the positive hangover from yesterday’s hawkish Bank of England minutes from their most recent monetary policy meeting.
The Canadian Dollar has continued its positive surge after yesterday’s better-than-forecast wholesale sales which indicated a growth of 0.6%; having only been forecast to expand by 0.4%. With no domestic data due to be released today the Canadian Dollar is likely to be affected by foreign currency movement, in particular the US Dollar.
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,0.5485 ,
Canadian Dollar,,US Dollar,0.9138 ,
Canadian Dollar,,Euro,0.6876 ,
Canadian Dollar,,Australian Dollar,0.9823,
Canadian Dollar,,New Zealand Dollar,1.0847 ,
US Dollar,,Canadian Dollar,1.0941 ,
Pound Sterling,,Canadian Dollar,1.8220 ,
Euro,,Canadian Dollar,1.4535 ,
Australian Dollar,,Canadian Dollar,1.0173 ,
New Zealand Dollar,,Canadian Dollar,0.9188 ,
[/table]
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