The Pound to Canadian Dollar Exchange Rate advanced on Monday after data showed that the North American nation’s economy grew less-than-forecast in April.
According to Statistics Canada gross domestic product, the sum of total goods and services produced in the country, advanced by just 0.1%. The meagre rise was a result of meagre growth in the retail sector and a fall in construction and mining output. Economists had been forecasting for a rise of 0.2%.
The 0.1% figure matched the previous months and is the lowest recorded since December last year when the economy contracted by 0.4%. In January the Canadian economy rebounded by 4% but that strength seems to be slipping back into stagnation.
Canada’s economy is the 11th biggest in the world, and like the United States its economy was hit by bad weather last winter. So economists had been hoping to see a bounce-back this quarter.
Following the data’s release the ‘Loonie’ retreated from its highest levels since January as investors embarked on a round of profit taking as they seek to get the best return before a forecasted decline sets in for the currency.
Last week’s better than forecast inflation data continues to offer the currency support however and so losses are expected to be restrained.
“It’ll probably result in some profit-taking on the Canadian Dollar’s recent rally. Given the increasing signs of mounting pressure on the Canadian Dollar the GDP number doesn’t necessarily mean a meaningful move lower,”
Earlier in the session the Canadian currency came under further pressure from a fall in oil prices as the supply of the commodity was deemed to not have been affected by the fighting in Iraq.
Sentiment over the situation improved slightly as well as Iraqi government forces launched a fight back in the northern city of Tikrit and as Russia delivered the first of 25 jet fighters to help in the fight.
The Canadian Dollar could receive some support on Tuesday if the latest Chinese manufacturing data comes in positively. A strong figure out of the world’s largest economy could increase demand for commodity based assets.
UPDATED: 06:00 GMT 30 June, 2014
Pound to Canadian Dollar (GBP/CAD) Exchange Rate Pares GDP data Gains
The Pound to Canadian Dollar (GBP/CAD) exchange rate pared initial gains before the close of North American trading.
Sterling rallied by over 0.4% against the ‘Loonie’ in the hours following the publication of slightly disappointing Canadian growth figures for April.
The Canadian Dollar also slipped against the US Dollar after the Canadian economy was shown to have grown by 0.1% in April, month-on-month rather than the 0.2% forecast.
Canada’s dollar was little changed at almost a five-month high versus its U.S. counterpart after fluctuating as data showed the nation’s economy grew less than forecast in April.
However, June’s Canadian inflation report continues to lend the domestic currency report and the Canadian Dollar recovered losses as the local session continued.
The Canadian Dollar clawed its way back to an almost five-month high against the US Dollar but was little changed against the Pound ahead of the release of UK Manufacturing PMI.
According to market analyst Omer Esiner; ‘Given the increasing signs of mounting pressure on the Canadian dollar, the GDP number doesn’t necessarily mean a meaningful move lower’.
However, if today’s UK Manufacturing PMI for June comes in above the 57 recorded in May, the Pound to Canadian Dollar exchange rate could advance.
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,0.5489 ,
Canadian Dollar,,US Dollar,0.9361 ,
Canadian Dollar,,Euro,0.6855 ,
Canadian Dollar,,Australian Dollar,0.9966,
Canadian Dollar,,New Zealand Dollar,1.0707 ,
US Dollar,,Canadian Dollar,1.0683 ,
Pound Sterling,,Canadian Dollar,1.8218 ,
Euro,,Canadian Dollar,1.4591 ,
Australian Dollar,,Canadian Dollar,1.0035 ,
New Zealand Dollar,,Canadian Dollar,0.9354 ,
[/table]
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