The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate began the local session little-changed having achieved a high of 1.8410 overnight.
Although Sterling softened against several of its most-traded currency counterparts in response to disappointing UK data on Wednesday, worsening geopolitical tensions and a risk-off environment helped the British asset recover some ground against its commodity-driven Canadian peer.
The Pound to Canadian Dollar exchange rate fell to a low of 1.8381.
Yesterday the UK’s Manufacturing and Industrial Production data showed a slower-than-forecast pace of expansion, putting a bit of a dampener on the Pound after Tuesday’s impressive Services PMI.
This less-than-thrilling set of figures was followed by a slightly lacklustre Gross Domestic Product estimate for the three months to July.
The National Institute of Economic and Social Research (NIESR) estimated that the British economy expanded by 0.6% in the three months to July. This was down from negatively revised growth of 0.8% in the first three months of the year and marked the slowest pace of quarterly expansion for a year.
The Office for National Statistics has estimated growth of 0.8% for the same period.
Earlier this week NIESR commented on the weakness of UK wage growth and the necessity of significant forward planning before the Bank of England increases interest rates.
NIESR economist Simon Kirby stated; ‘One thing that will happen as we converge on that policy turning point is if communication is not clear we will see volatility. On past performance there’s potential for some lack of clarity… it’s up to the Monetary Policy Committee to be as clear as they can be and clearer than they have been over the last six months.’
Meanwhile, the Canadian Dollar to US Dollar (CAD/USD) exchange rate continued to soften as the situation in Ukraine suppressed appetite for risk and the positive US reports kept coming.
In the view of one economist with the Royal Bank of Canada, the ‘Loonie’ could soon slide to a four-month low against its US rival.
He commented; ‘A further deterioration in the risk backdrop has sustained broad-based USD strength. Yesterday’s close above C$1.0958 has confirmed a full-blown trend change. We were looking for a bit of a pullback today, which the data corroborates. But would use pullbacks as a buying opportunity based on the recent bullish trend reversal in US Dollar/Canadian Dollar.’
Today’s Pound Sterling to Canadian Dollar Exchange Rate Forecast
Throughout the week economic data for Canada has been lacking, but the situation is set to change today as the nation publishes its Building Permits figures and Ivey Purchasing Managers Index.
Building permits are expected to have fallen by -1.4% in June after surging by 13.8% in July while the Ivey PMI is believed to have pushed back into growth territory, rising from 46.9 to 51.0.
Positive results could support the Canadian Dollar.
Movement in the Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate could also be caused by the Bank of England’s interest rate decision. That being said, the BoE is unlikely to make any changes to fiscal policy and no pertinent economic statements are expected to be made – so volatility could be low.
Fluctuations in the Canadian Dollar to US Dollar exchange rate could be driven by the US Initial Jobless and Continuing Claims figures.
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate is currently trending in the region of 1.8416.
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,0.5454,
Canadian Dollar,,US Dollar,0.9153,
Canadian Dollar,,Euro,0.6836,
Canadian Dollar,,Australian Dollar,0.9872,
Canadian Dollar,,New Zealand Dollar,1.0814,
US Dollar,,Canadian Dollar ,1.0931,
Pound Sterling,,Canadian Dollar,1.8396,
Euro,,Canadian Dollar,1.4623,
Australian Dollar,,Canadian Dollar,1.0113,
New Zealand Dollar,,Canadian Dollar,0.9246,
[/table]
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