Pound Sterling to Canadian Dollar (GBP/CAD) Exchange Rate
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate held on to the previous day’s gains on Thursday to trend around 1.8673 during the European session.
Although demand for the Pound was a little undermined by the UK’s disappointing public spending figures, the British currency did derive support from comments relating to inflation issued by a Bank of England (BoE) official.
David Miles highlighted the positive aspects of lower consumer prices and intimated that the UK was not in a dangerous disinflation spiral.
The ECB’s decision to unveil a 1 trillion Euro asset purchasing programme had little impact on GBP/CAD trading.
Earlier…
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate advanced to a five-year high on Wednesday in response to an unexpected move from the Bank of Canada (BOC).
A surprising interest rate cut from the BOC also pushed the US Dollar to Canadian Dollar (USD/CAD) exchange rate within touching distance of a 6-year high.
GBP/CAD Exchange Rate Rallies as BOC Cuts Rates
For much of yesterday’s European session the Pound was struggling against peers like the Canadian Dollar as demand for the British currency was quashed by the Bank of England’s (BoE) dovish meeting minutes.
The minutes showed that all nine members of the Monetary Policy Committee voted in favour of leaving interest rates on hold in January.
Given that policymakers had been divided in the previous four meetings, this sign of accord pushed BoE interest rate hike expectations even further into the future and saw Sterling falter.
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate achieved a high of 1.8748
However, the Pound went on to surge by over 3 cents following the BOC interest rate decision.
The announcement was expected to be fairly innocuous, but (as last week’s shock move from the Swiss National Bank illustrates) central banks have a habit of surprising expectations.
The BOC opted to cut its benchmark interest rate for the first time since 2010, taking it from 1.0% to 0.75%.
The decision was largely due to the recent extensive slide in oil prices and had widespread repercussions.
In the view of economist Thomas Costerg; ‘They are taking pre-emptive steps. If oil prices remain under pressure, you could potentially see further cuts. This was not expected, and it’s going to put pressure on the Loonie.’
Both the Australian Dollar and New Zealand Dollar fell along with their Canadian cousin as investors feared that the Reserve Bank of Australia (RBA) and Reserve Bank of New Zealand (RBNZ) would follow the BOC’s lead.
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate fell to a low of 1.8684
Pound Sterling to Canadian Dollar (GBP/CAD) Exchange Rate Forecast to Fluctuate after CPI
The Canadian Dollar is likely to maintain its bearish relationship with peers like the Pound and US Dollar ahead of tomorrow’s Canadian Consumer Price Index and retail sales report.
That being said, today’s UK public finance figures could have an impact on the GBP/CAD pairing and the USD/CAD exchange rate may fluctuate in response to the US initial jobless and continuing claims reports.
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate is trading in the region of 1.8712
The Canadian Dollar to Pound Sterling (CAD/GBP) exchange rate is trading in the region of 0.5342
The US Dollar to Canadian Dollar (USD/CAD) exchange rate was trading in the region of 1.2348
The Canadian Dollar to US Dollar (CAD/USD) exchange rate is trading in the region of 0.8097
