- UK currency dives as Osborne drops budget target – Chancellor abandons plans after ‘Brexit’
- Canadian Dollar remains mixed overall – ‘No news is good news’
- UK construction stats coming next week – EU Referendum may continue to negate data influence
The Pound has been an exceedingly undesirable option of late, on account of Chancellor George Osborne dropping efforts to reach a budget surplus by 2020. This development has added to yesterday’s dovish comments from the BoE, leading investors to abandon the flagging UK currency in droves over the course of the day.
By contrast, the ‘Loonie’ has been generally positive against its peers, with a lack of data serving to lower gains but also limit losses.
Looking ahead to the coming week, the Pound could be shifted over Monday and Tuesday when the construction and services PMIs for June come in; these currently have a mixed forecast assigned.
(Published 10:46 July 1, 2016)
The Pound has fared poorly against the Canadian Dollar of late, on account of confidence in Sterling repeatedly taking a battering over the course of the week.
The Canadian Dollar has been comparatively more positive, though with the coming of Canada Day, trading activity has been thinned by the closed domestic markets.
UK Economic News: Confidence in the Pound Remains Low after PM Leadership Clashes
The Pound has been in low demand across the board today, with gains being few and far between.
Exceptional movements for Sterling have included declines of -0.2% against the Canadian Dollar (GBP/CAD), -0.6% against the Australian Dollar (GBP/AUD) and -0.7% against the New Zealand Dollar (GBP/NZD). On the positive side, gains have been made of -0.4% against the Chinese Yuan (GBP/CNY), 0.3% against the South African Rand (GBP/ZAR) and 0.3% against the Turkish Lira (GBP/TRY).
Although the day’s earlier Markit/CIPS manufacturing PMI for June rose from 50.1 to 52.1, this was counteracted by Thursday’s lingering damage to the Pound’s appeal. In addition, Markit’s Rob Dobson stated of the results that:
‘Whether this growth recovery can be sustained will depend heavily on whether the current financial and political volatility spills over to the real economy’.
While a brief uptick was recorded yesterday after Boris Johnson pulled out of the race to become Conservative Leader and Prime Minister, Sterling was soon sent crashing down by warnings from Bank of England (BoE) Governor Mark Carney that UK interest rate cuts would be a distinct possibility due to ‘Brexit’-induced instability. The current state of the UK as a whole seems a world away from the pre-‘Brexit’ movements seen last month.
Canadian Dollar Uncertain on Fluctuating Commodity Prices
The appeal of the ‘Loonie’ has technically been higher than that of the Pound recently, although the Canadian currency has still recorded losses of -0.3% against the Australian Dollar (CAD/AUD) and -0.4% against the New Zealand Dollar (CAD/NZD) lately. The only real favourable advance has consisted of a 0.2% climb against the Pound (CAD/GBP).
As today is Canada Day, economic data releases are essentially non-existent, as the people of Canada celebrate the unity of three colonies into the country of Canada during the 19th century.
Nationally important commodities have been fickle recently, with the cost of crude oil dropping but the cost of gold climbing by contrast.
Yesterday, Canadian GDP printings for April beat expectations on the month and the year, rising respectively from -0.2% to 0.1% and from 1.2% to 1.5%.
Future GBP, CAD Forecast: BoE Comments Incoming, PMI Printings to Open Next Week
The last notable occurrence to affect pairing movement this week will come from the UK, when BoE official Andy Haldane delivers a speech during the afternoon; ‘Brexit’ is likely to colour any comments made.
Looking further ahead, the coming Monday will bring the June construction PMI from the UK, which is forecast to move from 51.2 points to 51.11.
From Canada, Monday will also bring the RBC manufacturing PMI for June, which has a decline from 52.1 to 51.63 on the cards.
Current GBP, CAD Exchange Rates
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate was trending in the region of 1.7200 and the Canadian Dollar to Pound Sterling (CAD/GBP) exchange rate was trending in the region of 0.5816 today.
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