GBP/CAD Exchange Rate Muted After Shock Contraction in UK Retail Sales
The Pound Canadian Dollar (GBP/CAD) exchange rate is rangebound this morning, in the wake of a underwhelming UK retail sales report.
At the time of writing the GBP/CAD exchange rate is trading at around CA$1.6590, virtually unchanged from this morning’s opening rate.
Pound (GBP) Steady ahead of BoE, Supreme Court
The Pound (GBP) is struggling to find momentum this morning as markets react to the UK’s latest retail sales figures
According to data published by the Office for National Statistics (ONS), retail sales contracted by 0.2% in August, coming in below expectations that sales growth would have stagnated last month.
However, Sterling may still see some movement today as still to come is the Bank of England’s (BoE) latest rate decision.
It’s widely expected that the BoE will continue to leave rates on hold this month as the bank awaits more clarity on Brexit.
With the BoE’s decision potentially proving to be a non-event it risks being overshadowed by the UK Supreme Court this afternoon, as judges deliver their ruling on whether Boris Johnson’s proroguing of Parliament was unlawful.
Should the court rule against the government Sterling could response by strengthening sharply, as it would likely hinder Johnson’s ability to suspend parliament again in the future to push through a no-deal Brexit.
Canadian Dollar (CAD) Hurt by Falling Oil Prices, Slip in Inflation
The Canadian Dollar (CAD) is also trading in a narrow range so far today in response to Canada’s latest Consumer Price Index (CPI) as well as the continued easing of oil prices from its recent highs.
Starting with the CPI figures, Canadian inflation came in at 1.9% in August, missing expectations it would have held at 2% for another month.
While this was only a modest decline in headline inflation it was enough to stoke some speculation on how much longer the Bank of Canada (BoC) will be able to go against the grain and keep interest rates on hold.
Meanwhile adding to the headwinds against the ‘Loonie’ this morning is the continued slide in oil prices.
Prices for the key Canadian export had shot up as high as $69 a barrel earlier this week, in the wake of a drone attack on Saudi oil facilities, but has subsequently settled at around $64 on suggestions the disruption to Saudi production may be more limited than initially feared.
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