The Canadian Dollar fell below 54 pence against the British Pound on Tuesday as the appeal of Sterling was boosted by strong UK services data.
The Pound posted widespread gains after the UK Markit services PMI moved further above the 50 mark separating growth from contraction, achieving a reading of 58.7.
A result of 57.8 had been anticipated by economists.
As this latest report supports the argument that UK economic growth got off to a good start in the second quarter the Pound was boosted.
Meanwhile, the ‘Loonie’ came under pressure during the local session as data revealed that Canada’s trade surplus narrowed in March.
A decline in exports saw the nation post a surplus of 79 million Canadian Dollars in March, down from February’s whopping 847 million Canadian Dollar surplus.
While imports advanced by 0.4 per cent, exports declined by 1.4 per cent.
This report was followed by Canada’s Ivey Purchasing Managers Index.
The PMI softened from 55.2 in Mark to 54.1 in April, slightly less than the 54.5 reading expected.
While the result remained above the 50 mark separating growth from contraction, it does reveal a modest cooling in the pace of purchasing activity growth.
As North American trading continued the GBP/CAD pairing consolidated gains while the USD/CAD pairing fluctuated following the publication of US trade data.
Although tomorrow’s UK BRC shop price index is unlikely to trigger much GBP/CAD movement, the pairing could fluctuate as a result of Canada’s building permits data.
Building permits are forecast to have risen by 4.3 per cent in March, month-on-month, following April’s 11.6 per cent decline.
Other Canadian economic reports to be aware of this week include housing starts, new housing price index, unemployment rate, net change in employment and participation rate.
A strong jobs gain could bolster the Canadian Dollar against its peers.
Of course the Bank of England’s rate decision and the NIESR GDP estimate for April will also be of interest to any GBP/CAD investors.
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,0.5399,
Canadian Dollar,,US Dollar,0.9173,
Canadian Dollar,,Euro,0.6584,
Canadian Dollar,,Australian Dollar,0.9809,
Canadian Dollar,,New Zealand Dollar,1.0579,
US Dollar,,Canadian Dollar ,1.0888,
Pound Sterling,,Canadian Dollar,1.8518,
Euro,,Canadian Dollar,1.5180,
Australian Dollar,,Canadian Dollar,1.0194,
New Zealand Dollar,,Canadian Dollar,0.9438,
[/table]
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