Pound Sterling to Canadian Dollar (GBP/CAD) Exchange Rate Recovers Losses
While the Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate was trending lower for much of Tuesday as a result of the UK’s disappointing services sector report, the ‘Loonie’ later fell as oil prices slid to 51 Dollars a barrel.
The Canadian Dollar fell against both the Pound and US Dollar as the price of its main commodity languished at a five and a half year low.
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate is currently trending in the region of 1.7941.
Today’s Canadian Ivey Purchasing Managers Index could cause further movement in the pairing.
Earlier…
GBP/CAD Exchange Rate Down 0.40%
As the European session continued on Tuesday and the UK’s Services PMI printed well below forecast levels, the Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate drifted to a low of 1.7848
The decline in UK service sector output, when combined with the slowing pace of manufacturing and construction sector growth, points to UK expansion of just 0.5% in the fourth quarter of the year.
This result is likely to further delay the Bank of England (BoE) increasing interest rates.
During the North American session Canada published its Industrial Product Price and Raw Materials Price Indexes.
Industrial Product Price declined by -0.4% during November, month-on-month, less of a decline that the -0.7% drop expected.
Meanwhile, the Raw Materials Price Index plummeted by -5.8% on the month in November, exceeded expectations for a fall of -4.7%.
The Pound Sterling to Canadian Dollar (GBP/CAD) continued trending around 0.4% lower after the figures were released.
Earlier…
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate put on a poor performance yesterday even as the price of crude oil fell below 50 Dollars a barrel.
GBP/CAD Exchange Rate Struggles despite Crude Oil Slump
Although crude oil, Canada’s main commodity, fell below 50 Dollars per barrel on bets that US crude inventories will contribute to the current surplus supply situation, the Canadian Dollar gained by around 0.8% against the Pound on Monday.
According to analyst Will Yun; ‘No one is willing to cut supplies while the strong Dollar is playing a negative role with uncertainties growing in Europe. Even if prices fall below 40 Dollars, the market may not be too surprised.’
The further easing in oil prices pushed the Canadian Dollar to US Dollar (CAD/USD) exchange rate to a five and a half year low.
However, the Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate failed to benefit from the development as the British currency was pressured lower by negatively revised Bank of England (BOE) rate hike bets.
With both Markit Manufacturing and Construction PMIs for the UK coming in below forecast levels, some economists are now pushing back their expectations for the first BoE increase in borrowing costs to the beginning of 2016.
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate fell to a low of 1.7910
Today’s Pound Sterling to Canadian Dollar (GBP/CAD) Exchange Rate Forecast
In the hours ahead the UK’s highly influential Services/Composite PMI reports are likely to have a significant impact on the Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate.
If the Markit reports register a hat trick of losses, the UK’s growth projections will be compromised and the Pound’s downtrend is likely to continue.
Economists have forecast that the UK’s Services index came in at 58.5 in December – still well above the 50 mark separating growth from contraction but down from the 58.6 figure recorded in November.
If the gauge is shown to have fallen more than that, further Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate losses can be expected.
The Markit Composite PMI, which takes into account Services, Construction and Manufacturing, is believed to have dipped from 57.6 to 57.4.
Some additional GBP/CAD exchange rate movement could be occasioned by Canada’s Industrial Product Price and Raw Materials Price Indexes.
However, the first notable Canadian data of the New Year, the nation’s Ivey Purchasing Managers Index, is not due out until tomorrow.
Volatility in the Canadian Dollar to US Dollar (CAD/USD) exchange rate could be caused by the US ISM Non Manufacturing Composite report. Strong US data may push the CAD/USD pairing to fresh lows.
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate is trading in the region of 1.7915
The Canadian Dollar to Pound Sterling (CAD/GBP) exchange rate is trading in the region of 0.5575
The US Dollar to Canadian Dollar (USD/CAD) exchange rate was trading in the region of 1.1767
The Canadian Dollar to US Dollar (CAD/USD) exchange rate is trading in the region of 0.8496
