The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate is trending within a narrow range on Friday morning.
After December’s British retail sales trumped estimates, the Pound strengthened versus most of its major peers. The positive data extended an advance initiated by the European Central Bank (ECB) easing process improving the prospect of cheaper trade with Europe.
The Canadian Dollar exchange rate strengthened on Friday morning as a result of rising oil prices. The death of Saudi Arabia’s King stoked speculation that their oil policy will change. However, the Canadian inflation data due later on Friday is likely to provoke ‘Loonie’ (CAD) volatility.
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate is currently trending in the region of 1.8579.
Pound Sterling (GBP) Exchange Rate Trending Higher on Retail Sales
The ECB’s move to add €60 billion per month liquidity to the Eurozone was positive for the Pound, with the prospect of cheaper trade bolstering demand for the British asset. Given that traders are seeking safe places to store their money whilst easing policies amplify risk, the higher-yielding potential of the Pound compared to its major counterparts has aided the Sterling uptrend.
British data printed positively on Friday, adding to positive sentiment towards Sterling. Retail Sales were forecast to drop from 6.8% to 3.4% on an annual basis in December, but the actual result only fell to 4.3%. In addition, Retail Sales including Auto bettered estimates of a drop from 6.4% to 3.0%, with the actual result only sliding to 4.2%. – I would mention the monthly increase too.
Paul Hollingsworth of Capital Economics said: ‘December’s retail sales figures paint a surprisingly upbeat picture of high street spending over the Christmas period. This suggests that UK retailers’ adoption of the US tradition of heavy discounting around Black Friday did not merely cause consumers to bring forward their Christmas purchases, but encouraged them to spend even more.’
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate has fallen to a low today of 1.8525.
Canadian Dollar (CAD) Exchange Rate Gains on Oil Prices
After Saudi Arabia’s King died, commodity strategists speculated that their policy would change for the better, causing the prices of oil to rise. The Canadian Dollar benefitted from higher oil prices, but the gains have been somewhat laboured as traders await inflation data due later on Friday afternoon.
‘It was expected the oil market would react nervously to the king’s death,’ said Giovanni Staunovo, Zurich based analyst. ‘But it’s likely to be a short-term reaction as the majority of market participants don’t expect a change in Saudi policy. Since the bounce, prices have drifted lower again.’
Pound Sterling to Canadian Dollar (GBP/CAD) Exchange Rate Forecast to Gain
Given that most experts feel the rise in oil is a knee-jerk reaction, and with Canadian inflation data forecast to decline, there is heightened potential for the Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate to advance on Friday.
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate advanced to a high today of 1.8608.
