Canadian Dollar (CAD) Exchange Rate Trends Higher after BOC Hold Interest Rates Steady
The Pound (GBP) has weakened against both the US Dollar (USD) and the Canadian Dollar (CAD) on Thursday morning, as investors continue to lack motivation to buy back into the softened currency. Although oil prices have remained weaker the ‘Loonie’ has been shored up after the Bank of Canada (BOC) opted to leave interest rates unchanged, signalling a greater measure of confidence in the domestic economy. As a result the Pound Sterling to US Dollar (GBP/USD) exchange rate has been on a downtrend at 1.4173, while the Pound Sterling to Canadian Dollar (GBP/CAD) pairing has slumped around 2.0533.
Earlier…
Although the Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate is trending higher as oil prices decline, the Pound Sterling to US Dollar (GBP/USD) pairing remains weakened today.
Reduced Odds of 2016 BoE Interest Rate Hike turn Pound Sterling (GBP) Bearish
Following Bank of England (BoE) Governor Mark Carney’s more dovish comments regarding the central bank’s outlook on interest rate policy the Pound (GBP) slumped sharply across the board, with the odds of a 2016 rate hike seemingly diminished. As inflation remains well shy of the BoE’s 2% target there is still little pressure on policymakers to consider tightening monetary policy, particularly as the uncertainty of the upcoming European Union membership referendum weighs heavily on the prospects of the domestic economy.
While Sterling was somewhat shored up this morning by the revelation that the ILO Unemployment Rate had unexpectedly fallen to 5.1% in the three months to November the bullish impact of this data was limited by a disappointing deceleration in Average Weekly Earnings. As the Monetary Policy Committee (MPC) has repeated stated that the sluggish pace of wage growth is a key cause of concern in considering monetary policy this result would only appear to have dented the likelihood of a nearer-term rate hike further.
US Dollar (USD) Exchange Rate Bolstered ahead of US Inflation Data Today
Although the US Dollar (USD) was softened on the back of a strong resurgence in risk appetite yesterday, as China’s weak GDP figures prompted hopes of further economic stimulus, stock markets have since returned to a more volatile state. Pundits are optimistic ahead of the latest US Consumer Price Index report, with expectations that inflation will have strengthened further in December. Should inflationary pressure be found to have risen, in spite of negative global headwinds, the ‘Greenback’ is likely to trend higher across the board with encouragement that a solid result would offer to the Fed in considering a further interest rate hike.
Canadian Dollar Currency News: CAD Forecast to Soften Further with Dovish BOC Rate Decision
Confidence in the ‘Loonie’ (CAD) has remained largely weak ahead of this afternoon’s Bank of Canada (BOC) interest rate decision, with some investors speculating that a rate cut could be in the offing as a result of persistent economic weakness. Despite oil prices and commodity-correlated currencies having rallied in response to Tuesday’s Chinese data many of those gains have since been reversed. Having broken back above $30 yesterday Brent crude has once again slipped below the $28 mark, as traders absorb the implications of the International Energy Agency’s (IEA) assertion that the global oil market will remain in a state of oversupply for much of the coming year.
Current GBP, USD, CAD Exchange Rates
At the time of writing, the Pound Sterling to US Dollar (GBP/USD) exchange rate was on a downtrend at 1.4159, while the Pound Sterling to Canadian Dollar (GBP/CAD) pairing was making gains around 2.0738. Meanwhile, the US Dollar to Canadian Dollar (USD/CAD) exchange rate was trending higher in the range of 1.4646.
Comments are closed.