The Pound to Canadian Dollar (GBP/CAD) exchange rate was trading softer on Monday and is likely to remain softer throughout the session due to a lack of market moving data releases and as the Canadian currency remains buoyed by last week’s positive jobs data.
Last week’s data showing that the Canadian unemployment rate fell to its lowest level since November 2008 continued to bolster the ‘Loonie’. The country’s unemployment rate fell from September’s rate of 6.8% to 6.5% in October.
The Canadian economy produced an unexpectedly strong 43,100 jobs in October, all in the private sector and mostly full-time positions, pushing the unemployment rate to a six-year low.
Sterling in comparison was weakened by a string of softer than expected data releases which caused economists to raise their bets that the Bank of England will not choose to raise interest rates until later next year. The US Federal Reserve is now more likely to hike rates first.
Also supporting the Canadian Dollar was news that the value of crude oil rose to its highest level in a week after Chinese data showed that exports from the world’s second largest economy beat economist forecasts.
As Canada’s biggest export is crude oil, the currency benefits from an improvement in prices.
Pound Softer on Bank of England Warning
The Pound meanwhile softened against several major peers after Bank of England Governor Mark Carney reiterated his warnings about the Eurozone. Economists are expecting the Bank to cut its growth forecasts next week.
Also continuing to weigh on the Pound was last week’s run of disappointing data releases and the decision by Bank of England policy makers to leave interest rates unchanged at the record low level of 0.5%.
The GBP/CAD exchange rate is likely to experience some movement later in the session due to the publication of the latest Canadian Housing starts report.
Pound to Canadian Dollar Exchange Rate Stays Softer
The Pound breifly edged higher against the Canadian Dollar in the afternoon but then slipped back to earlier levels and stayed there, further movement is likely to be muted due to a lack of market moving economic data releases. Against the US Dollar, the Canadian Dollar advanced to its best level in a week as last week’s softer than forecast US Nonfarm payrolls data weighed on the ‘Greenback’.
The Canadian Dollar breifly softened against the Pound after domestic data released by Canada Mortgage and Housing Corp showed that housing starts fell to an annualised level of 183,604 units in October, down from the 197, 355 recorded in September. The figure was the lowest recorded in seven months. Economists had been expecting an increase of around 200,000.
The next big movement of the GBP/CAD exchange rate is likely to occur on Friday when the latest Canadian Manufacturing Sales data is published. Prior to that the Pound is likely to strengthen as economists forecast that Wednesday’s UK employment and wage growth reports will come in positively.
Pound to Canadian Dollar Exchange Rate Firmer on Tuesday
The Pound regained lost ground against the Canadian Dollar on Tuesday as a report released by the British Retail Consortium (BRC) showed that retail sales increased by 1.4% in October as UK consumers went all out for Halloween.
The ‘Loonie’ however came under pressure after crude oil prices slipped again.
Economists are forecasting that US crude oil supplies are continuing to outstrip demand. With supplies remaining high out of the Middle East and elsewhere, prices are likely to continue to fall.
A lack of market moving data is likely to see the GBP/CAD exchange rate little moved but further weakness in oil prices will likely continue to weigh on the Canadian Dollar.
Pound Sterling to Canadian Dollar Exchange (GBP/CAD) Rate Forecast for Volatility on Wednesday
Early in Wednesday’s session the ‘Loonie’ edged higher against the Pound and other peers as investors increased their demand for higher yielding assets ahead of UK and Eurozone data releases. A sell-off of the US Dollar by profit takers also supported the currency. The GBP/CAD exchange rate is forecast to experience volatility depending on the outcome of the latest Bank of England inflation report.
Economists are expecting the BoE to revise down its growth forecasts but at the same time reaffirm that the UK is the fastest growing G-7 economy. Also due for release is unemployment and wage growth data, both of which are expected to show improvement.
Unemployment is expected to decline and wages and expected to rise, which could limit downward movement from the BoE revisions.
On Thursday the GBP/CAD exchange rate declined to its weakest level in 2-months as the BoE inflation report continued to weigh heavily upon the Pound. As the session progressed Sterling recovered some lost ground as falling oil prices weighed upon the ‘Loonie’. Canadian house price data also came in softer than forecast.
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,0.5602 ,
Canadian Dollar,,US Dollar,0.8815 ,
Canadian Dollar,,Euro,0.7062,
Canadian Dollar,,Australian Dollar,1.0089,
Canadian Dollar,,New Zealand Dollar,1.1153 ,
US Dollar,,Canadian Dollar,1.1344 ,
Pound Sterling,,Canadian Dollar,1.7852 ,
Euro,,Canadian Dollar,1.4161 ,
Australian Dollar,,Canadian Dollar,0.9913 ,
New Zealand Dollar,,Canadian Dollar,0.8967 ,
[/table]
