The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate added to previous losses on Thursday as a lack of UK data left the Pound struggling and the Canadian Dollar was supported by on-target domestic housing data.
Yesterday the Pound exchange rate broadly declined in response to a severe reduction in the odds of the Bank of England increasing interest rates this year.
Some investors had been hoping for an interest rate hike in November but with wage growth coming in well below the rate of inflation and the BoE slashing its future forecasts for average earnings, that prospect has all but vanished.
The Pound posted extensive and widespread declines on Wednesday and went on to consolidate these losses after a member of the Monetary Policy Committee stated that the BoE can afford to keep interest rates at record lows for some time to come.
When speaking of the fact that the rate of inflation is still below the BoE’s target of 2%, David Miles was quoted as saying; ‘That’s very good news because it means that we’re not going to be pushed into raising interest sharply, because the inflation outlook remains pretty subdued.’
The appeal of the Pound was also reduced by a decline in the RICS House Price Balance.
During the North American session the Pound Sterling to Canadian Dollar exchange rate was trending around 1.8199.
The Canadian Dollar was ever-so-slightly supported by Canada’s New Housing Price Index.
As economists’ anticipated the index showed an increase of 0.2% in June, month-on-month.
The index was up 1.5% on the year.
In the report Statistics Canada noted; ‘New home prices in Calgary rose by 0.3% in June, as builders continued to report higher material and labour costs, good market conditions and higher costs for developed land as the reasons for the gain. This was the smallest monthly price increase in Calgary since December 2013. Other significant month-over-month increases occurred in the CMAs of Quebec and Winnipeg. According to builders, land prices contributed to the increase in Quebec, which posted its largest gain since November 2012.’
Canadian Dollar gains were limited as the price of Brent oil, one of Canada’s major exports, was shown to have fallen for a fourth day in five.
Today’s Pound Sterling to Canadian Dollar Exchange Rate Forecast
Tomorrow several factors could cause movement in the Pound Sterling to Canadian Dollar exchange rate, including the UK’s second quarter growth data and Canada’s Manufacturing Shipments and Existing Home Sales figures.
Manufacturing shipments are expected to have increased by 0.4% on the month in June. A better than expected increase could cause some final losses in the GBP to CAD exchange rate before the weekend.
GBP to CAD Static Despite Better-Than-Expected UK GDP
The Pound Sterling to Canadian Dollar exchange rate has remained relatively consistent with yesterday.
Its bearish nature is a combination of the positive Canadian housing data and the negative UK labour market data. Today’s better-than-forecast UK year-on-year Gross Domestic Product (GDP) data has had little impact on movement as the delay to an interest rate hike has dominated trader focus.
Movement for the Pound to Canadian Dollar today is likely to be dictated by Canadian domestic data releases. Unemployment rate and net change in employment will have significant weighting on Canadian economic standing
Canadian Dollar (CAD) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Canadian Dollar,
,Pound Sterling,0.5494,
Canadian Dollar,,US Dollar,0.9170,
Canadian Dollar,,Euro,0.6849,
Canadian Dollar,,Australian Dollar,0.9840,
Canadian Dollar,,New Zealand Dollar,1.0815,
US Dollar,,Canadian Dollar ,1.0898,
Pound Sterling,,Canadian Dollar,1.8197,
Euro,,Canadian Dollar,1.4605,
Australian Dollar,,Canadian Dollar,1.0160,
New Zealand Dollar,,Canadian Dollar,0.9197,
[/table]
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