The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate began Friday’s session in a narrow range after GFK UK Consumer Confidence fell in December.
The index resided at -4 in December, retreating further from November’s -2.
Industry expert Charles Davis commented: ‘The recent slip in consumer confidence has for the most part been driven by a slump in job security. While the headline unemployment rate has dropped rapidly over the last year or so, plenty of people are unsure about where their next pay cheque is coming from.’
On Thursday… The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate advanced during Thursday’s European trading after UK Retail Sales figures and dovish US Federal Reserve language offered the Pound some support.
Industry expert Jane Foley stated: ‘The market was taken by surprise. Retail sales were extremely strong. However, markets aren’t anticipating a rate rise until 2016 and even strong data isn’t enough to change that.’
Earlier… The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate had been trending within a narrow range ahead of UK Retail Sales figures; however when the data surprised economists’ forecasts, the British currency began to climb.
UK Retail Sales figures jumped to 6.9% in November on the year. Predictions for a softer 4.5% were blown completely out of the water and October’s figure was upwardly revised from 4.6% to 4.9%.
Meanwhile, the US Dollar to Canadian Dollar (USD/CAD) exchange rate made advances after Federal Reserve Chairwoman announced that interest rates wouldn’t be rising before April.
Federal Reserve Chairwoman Janet Yellen stated: ‘The statement that the committee can be patient should be interpreted that it is unlikely to begin the normalisation process for at least the next couple of meetings.’
With no domestic data out for Canada on Thursday, the ‘Loonie’ exchange rate is volatile to any global developments. However, after oil made moderate gains in Wednesday’s session, the commodity has fallen back to five-year lows.
Oil Director Carl Larry commented: ‘The new normal will be lower prices. [OPEC members] are trying to get in front of one consumer and that would be China. I don’t really think they believe they can get back the US consumer with all the fracking that’s going on, but I do think they want to get as much as they can in China. ‘
Oil Prices Rise from Five-Year Low -Canadian Dollar (CAD) Exchange Rate Gains
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate took a dive in the second half of Wednesday’s European trading as the price of oil began to climb from a five-year low.
Strategist Bill O’Grady commented: ‘We are now finally reaching a point where the market isn’t going completely straight down anymore. It probably has much less to do with fundamentals and a lot more to do with traders positioning.’
Earlier… The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate remained in a narrow range during Wednesday’s European session after the Bank of England (BoE) meeting minutes and hefty UK employment data.
Meanwhile, the Canadian Dollar fell against the US Dollar ahead of the US Federal Reserve’s Economic Projections and Federal Open Market Committee’s (FOMC) interest rate announcement.
CAD/USD Exchange Rate Falls
Wednesday’s FOMC decision could cause massive market movement as investors eagerly anticipate whether the central bank will continue to state that interest rates should remain low for a ‘considerable time’.
However, recent setbacks have caused a global slowdown and led some economists to believe that the Fed may not be as close to raising rates. Russia’s Ruble appears to be collapsing and the overnight interest rate rise by the Russian central bank failed to offer any support.
Other concerns over another financial crisis have also become evident in recent months as the Eurozone fails to grow, hovering on the precipice of deflation or a triple-dip recession.
However, some hawkish economists expect the Federal Reserve to look past these slowdown factors and make its first steps towards raising rates by way of a language change.
A former Fed research director, David Stockton, predicts the Fed will replace the ‘considerable time’ slogan with something to say they’ll be patient before hiking rates.
Stockton commented: ‘Policy moves slowly and deliberately and in response to a full set of evidence accumulated since the last meeting, and not in response to the most high-frequency data from volatile financial markets. [The Russian crisis will] deflect them from the path that they’re on, which is probably a tightening in the middle of 2015.’
Meanwhile, the Bank of England released its meeting minutes early in Wednesday’s session which saw the same two Monetary Policy Committee (MPC) hawks—Martin Weale and Ian McCafferty—vote in favour for rate hikes yet again.
The minutes read: ‘For two members, economic circumstances continued to justify an immediate rise in Bank Rate. While CPI inflation was well below the target, this was largely the direct effect of the higher exchange rate and lower raw material prices.’
The Canadian Dollar has had a rough time in the market of late as a result of falling oil prices. Crude values have dropped massively in the recent months hitting five-year lows.
On Tuesday Brent crude oil fell below $59 a barrel for the first time since May 2009.
Commodity expert Eugen Weinberg stated: ‘What we saw yesterday was a dead-cat bounce but the negative trends of oversupply and weaker demand growth are still persisting. New lows can be expected and I wouldn’t wonder if the market tests the $50 mark before the end of the year.’
Pound Sterling to Canadian Dollar, US Dollar to Canadian Dollar Forecasts
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate could feel fluctuations from the release of Canadian Wholesales figures out later in Wednesday’s session.
Meanwhile, UK Retail Sales figures are out on Thursday ahead of a highly influential day for the Canadian Dollar on Friday.
The Bank of Canada (BOC) will release its Consumer Price Index (CPI) which could offer the Canadian Dollar some movement. The BOC measure is expected to rise from 2.3% to 2.5% on the year in November.
At present, the most influential event for the US Dollar will be the result of the FOMC meeting and projections by the Federal Reserve.
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate is trending in the region of 1.8328, while the US Dollar to Canadian Dollar (USD/CAD) exchange rate resides at 1.1653.
