- Pound Sterling rallies on reduced expectations for UK exiting EU
- Advance comes in spite of recent fall in housing loans
- Canadian Dollar appeal limited by pessimistic predictions for GDP data
- UK GDP data out tomorrow, along with OECD speech
The Pound (GBP) has been faring extremely well against the Canadian Dollar (CAD) and other peers today, on a sea change in UK Referendum outcome predictions.
The Canadian Dollar, meanwhile, has failed to respond in kind to the price of oil rising slightly.
UK Economic News: Pound Sterling ‘Perceptions Shift’ on UK Referendum Predictions
The Pound (GBP) has been a safe bet against virtually all of its peers today, having rallied with varying degrees of strength across the board. Against the ‘Loonie’ (CAD) in particular, a notable improvement has been made on last week.
The most notable advances recorded for the UK currency have included 0.3% against the Canadian Dollar (GBP/CAD), 0.4% against the Euro (GBP/EUR), 0.5% against the US Dollar (GBP/USD) and 0.8% against both the Thai Baht (GBP/THB) and the South African Rand (GBP/ZAR).
Possibly the biggest recent boost to the appeal of the Pound has ironically come from the event that has been causing it the most damage in recent months – the UK Referendum debate.
The latest attitude adjustment has clearly favoured the stability-linked ‘In’ campaign, as Millenium Global Investments Managing Director Richard Benson has identified.
Speaking in response to the latest estimates of a ‘Brexit’, some of which put the chances as low as 25%, Benson said:
‘It’s essentially a change in perception with regards to the probability of a ‘Brexit’. The move is not so much people taking profit, it’s people stopping out their losses in Sterling positions.’
On a less supportive front, the only real UK domestic data of the day, covering the BBA loans for house purchases in March, has shown a disappointing drop from 45646 to 45098 against predictions of a rise to 46500.
Canadian Dollar (CAD) Limited Overall on Poor Outlook for GDP Stats This Week
The appeal of the ‘Loonie’ in the eyes of investors today has been mixed, as while an advance of 0.2% against the US Dollar (CAD/USD) has been recorded, the Canadian currency has also declined by -0.3% against the Pound Sterling (CAD/GBP).
Commodity prices have remained fickle today, as while the price of crude oil on the WTI Index has risen, the price of gold has conversely dropped.
One of the biggest limiters of ‘Loonie’ movement of late has been a prediction from BMO Capital Markets Senior Economist Benjamin Reitzes, regarding Friday’s scheduled GDP announcement for February.
Speaking recently, Reitzes has predicted that:
‘Declines in exports, manufacturing and wholesale trade are expected to weigh [on output]…the Q1 growth spike is not sustainable’.
Future GBP, CAD Forecast: BOC Poloz Speech due Today, UK GDP Data Tomorrow
The next ecostats scheduled to be released for the GBP/CAD pairing are set to come from Canada first, in the form of a speech and press conference conducted by Bank of Canada (BOC) Governor Stephen Poloz early this afternoon.
Following on from this tomorrow morning will be the UK’s negatively forecast actual GDP outcomes for the first quarter, while in the evening, a speech is expected from Canadian Minister of Finance Bill Morneau.
Current GBP, CAD Exchange Rates
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate was trending in the region of 1.8406 and the Canadian Dollar to Pound Sterling (CAD/GBP) exchange rate was trending in the region of 0.5438 today.
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