UPDATE
The Pound Sterling to US Dollar (GBP/USD) and Canadian Dollar (GBP/CAD) exchange rates were trending within a tight range on Tuesday morning.
With an absence of influential domestic data, the Pound is holding steady versus most of its major peers. Slower-than-forecast house growth was counteracted with a report from Halifax which signalled robust underlying growth tendencies. The US asset is holding a weak position after yesterday’s data printed poorly. The Canadian Dollar, meanwhile, is trending statically with crude prices having seen little by way of significant movement on Tuesday morning.
The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.5152.
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate is currently trending in the region of 1.9841.
Yesterday…
Pound Sterling to Canadian Dollar (GBP/CAD) Conversion Rate Forecast to Dive as Crude Futures Rise
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate softened by around -0.6% on Monday afternoon.
After British economic data showed services growth accelerated at the slowest pace since March 2013, the Pound declined versus most of its currency rivals. September’s Markit Services PMI was forecast to advance from 55.6 to 56.0, but the actual result defied projections by falling to 53.3. The services sector is the main driver of British growth so the poor result naturally weighed on demand for the British asset. In addition, the result caused many futures traders to delay bets as to the timing of a Bank of England (BoE) rate hike.
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate is currently trending in the region of 1.9848.
Crude oil futures rose on Monday after the Shanghai Composite Index ended the Asian session 0.5% up. This indicated that China’s equity market is moving closer to stability which should see amplified demand for crude from the world’s second-largest economy. Additional ‘Loonie’ (CAD) gains can be linked to mounting speculation that the Federal Reserve will look to delay a benchmark rate hike while labour market conditions prove to be an economic sore point.
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate was trending within the range of 1.9840 to 2.0006 during Monday’s European session.
Pound Sterling to US Dollar (GBP/USD) Exchange Rate Forecast to Hold Steady after US Non-Manufacturing Composite Misses Estimates
The Pound Sterling to US Dollar (GBP/USD) exchange rate was trending within a limited range on Monday afternoon.
In response to the disappointing British services data, Chris Williamson, Chief Economist at Markit stated; ‘The rate of economic growth slowed to a two-and-a-half year low in September, according to PMI survey data, suggesting that the economy sank further into a soft patch at the end of the third quarter. The survey data indicate that GDP growth slowed to 0.5% in the third quarter, but that the economy is entering the fourth quarter at a pace down to just 0.3%. Weakness is spreading from the struggling manufacturing sector, hitting transport and other industrial-related services in particular. There are also signs that consumers have become more cautious and are pulling back on their leisure spending, such as on restaurants and hotels. Wider business service sector confidence has meanwhile also been knocked by global economic worries and financial market jitters.’
The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.5174.
The US Dollar has held a weak position versus its major peers since Friday’s Change in Non-Farm Payrolls shocked to the downside. The report held no silver lining for pundits, although many feel that it was a freak result. On Monday, the US Dollar continues to see damp demand after domestic data produced disappointing results. Both September’s Non-Manufacturing Composite and Labour Market Conditions Change weakened beyond expectations. This has caused many to speculate that the Fed will delay a benchmark interest rate increase into 2016 until labour market conditions have improved sufficiently.
The Pound Sterling to US Dollar (GBP/USD) exchange rate was trending within the range of 1.5158 to 1.5245.
BoE Interest Rate Minutes to Dominate Focus This Week
Thursday’s Bank of England interest rate decision is most likely to be the focus for markets this week. With that being said, the actual decision won’t be particularly important given that most expect the central bank to hold policy at this time. However, the accompanying minutes will certainly be closely watched by investors. Should the minutes indicate one or more policymakers voted for an immediate rate increase the Pound will likely rally versus its peers.
In terms of Canadian and US Data, Friday’s Canadian Labour market data and Thursday’s Federal Open Market Committee (FOMC) minutes will have the greatest potential to provoke market movement.
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