GBP to CAD Exchange Rate weaker on better than forecast Canadian GDP data

Pound Sterling to Canadian Dollar exchange rate

The Pound to Canadian Dollar (GBP/CAD) exchange rate was weaker on Monday after Gross Domestic Product data for the North American nation came in better than economist expectations.

According to Statistics Canada, the Canadian economy expanded by 0.5% in January, reversing the -0.5% recorded in December and was better than the 0.4% expansion expected. On a yearly basis the economy expanded by 2.5% in January, adding to the previous months yearly growth figure of 2.4%.

Economic growth was supported by a rebound in the nation’s manufacturing, oil, gas and mining sectors. Construction also saw a rise and services advanced by 0.3%.

The data caused the ‘Loonie’ to climb to session a session high against the US Dollar and saw the Euro erase its earlier gains.

The Euro had made gains earlier in the session after a report showed that inflation across the single currency region fell to its weakest level since 2009. The currency benefitted from the normally negative data as speculation rose that the European Central Bank will now introduce easing and stimulus measures to help deflect the threat of deflation in the Eurozone.

The ‘Loonie’ was restrained from making further gains however as a separate report came in worse than forecast.

In a separate report, Statistics Canada’s payrolls survey showed a loss of 7,000 jobs in January. The agency’s much timelier but more volatile Labour Force Survey had reported a gain of 29,400 jobs in January, followed by a loss of 7,000 in February.

Tomorrow sees the publication of the latest Canadian PPI data. The report is likely to be overshadowed by releases in the EU and USA however.