The Pound Canadian Dollar (GBP CAD) exchange rate rallied from a seven month low earlier this morning as markets become increasingly cautious ahead of central bank speech at Jackson Hole later this afternoon.
Pound (GBP) Gains as Markets Await Central Bank Speeches
The Pound edged slightly higher this morning as investors moved into a holding pattern this morning ahead of key speeches by the Federal Reserve and the European Central Bank (ECB) later today.
Markets are hoping that the banks will divulge some information about their plans for future monetary policy, with particular focus being placed on the speech by Fed Chair Janet Yellen as investors look for any hints that a third rate hike can be expected this year.
‘Investors have long been unsure that there’ll be another rate hike this year and the message seems to finally be filtering through to the Fed. It will be interesting to see whether Yellen will address this today.’
Canadian Dollar (CAD) Strengthened by Rise in Oil Prices
Meanwhile the Canadian Dollar remained in a positon of strength this morning as oil prices began to rise once again.
This latest rally in crude comes as Hurricane Harvey bears down on the US, with analysts forecasting it could cause major disruptions to oil production in Texas and other nearby areas as weather experts suggest that it may become the biggest storm to hit the US mainland in nearly twelve years.
Jeffrey Halley, market analyst at brokerage OANDA said;
‘Damage and flooding to refineries and shale fields, disrupted production in the Gulf of Mexico and infrastructure damage are unlikely to be bearish for WTI.’
With crude products accounting for nearly 20% of Canada’s total exports by USD, the ‘Loonie’s fortunes are generally tied closely to oil markets.
GBP CAD Forecast: Canadian Q2 Growth to Slow?
Looking ahead the GBP CAD exchange rate may advance late next week as Canada releases its latest GDP figures on Thursday as economists forecast that the nation’s economic growth may have slowed in the second quarter after rocketing higher at the start of the year.
Meanwhile the Pound may struggle to advance over the next few sessions as thin trading volumes over the bank holiday weekend in the UK and a lull in domestic data until Wednesday leaves Sterling exposed to external influences.
Current Interbank Exchange Rates
At the time of writing the GBP CAD exchange rate was trending around 1.7562 and the CAD GBP exchange rate was trending around 0.5687.
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