The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate gained by around 1.04% on Wednesday afternoon.
As traders await British labour market data, the Pound is generally holding steady versus the majority of its most traded currency rivals. A slight appreciation can be attributed to expectations that the data will print positively.
The Canadian Dollar, meanwhile, is trending lower versus many of its major peers as a result of geopolitical tensions in Libya. Oil prices also dipped a little amid anxieties of oversupply.
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate is currently trending in the region of 1.9217.
Yesterday…
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate dived by around -0.60% on Tuesday.
Although British inflation dropped beyond expectations, the fact it avoided falling into negative territory was seen as a positive. Additionally, core inflation improved, which caused the Pound to strengthen versus many of its major peers.
The Canadian Dollar, meanwhile, rallied as a result of oil prices nearing a 2015 high. Should oil prices continue to rise; the Bank of Canada (BOC) can avoid further policy easing after having recently cut the benchmark rate.
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate is currently trending in the region of 1.9039.
Pound Sterling (GBP) Exchange Rate Edges Higher on Core Inflation
After Bank of England (BoE) Governor Mark Carney stated that low inflation wouldn’t impact upon a rate hike, the low consumer prices score on Tuesday was less impactful on the Pound. The year-on-year Consumer Price Index was expected to drop from 0.5% to 0.4%, but the actual result dropped to 0.3%.
‘Although the low inflation is, as the Bank of England confirmed last week, driven by lower food and energy prices rather than damaging deflation, we will remain vigilant to all risks, particularly when the global economic situation is so uncertain,‘ said Chancellor George Osborne.
Core inflation printed positively, however, which highlights the fact that low inflation was caused by energy prices rather than deflation. The yearly Core Inflation Rate advanced from 1.3% to 1.4% in January.
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate has fallen to a low of 1.9022.
Canadian Dollar (CAD) Exchange Rate Rallies on Crude Rise
Given its sensitivity to oil prices, it is perhaps unsurprising that the Canadian Dollar strengthened versus most of its major peers. Oil is nearing a 2015 high at 62 a barrel as a result of mounting geopolitical tensions in Libya.
‘The oil price is finding additional support from renewed greater perception of the risks to supply,’ said Carsten Fritsch, analyst at Commerzbank. ‘In the short term, the momentum suggests that prices will climb further.’
Pound Sterling to Canadian Dollar (GBP/CAD) Exchange Rate Forecast to Hold Losses
Unless there is a serious reversal in oil prices, the Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate is likely to hold losses for the remainder of Tuesday. Canadian home sales data has the potential to provoke volatility, but is unlikely to overshadow crude prices.
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate reached a high today of 1.9160.
