The Pound softened against the Canadian Dollar on Thursday as the UK currency remained under pressure from Wednesday’s Bank of England comments and Canadian data came in positively.
Official data released by Statistics Canada showed that manufacturing sales in the North American nation increased by 0.4% to $50.9 billion in March marking the sixth advance recorded in seven months.
Statistics Canada said that the increase was a result of higher sales in plastics and rubber, food and machinery production industries.
Sales in the coal, petrol and paper industries however fell.
Overall sales were up in 11 out of 21 industries, representing around two-thirds of Canada’s manufacturing sector.
The Pound to Canadian Dollar exchange rate (GBP/CAD) is trading in the region of 1.8240 .
Sales increased the most in the Ontario, Alberta and Quebec regions.
The sales were the highest recorded since July 2008, the previous peak reached before the start of the global recession began.
The ‘Loonie’ eased slightly against the US Dollar after data out of the USA showed that the number of US citizens claiming unemployment benefits fell to the lowest level in seven-years.
Overall claimants fell by 24,000 to 297,000, beating forecasts for a fall to 320,000.
The figure was the lowest seen since May 2007.
“If this keeps up it could mean another month of strong job gains,” said an economist at BMO Capital Markets.
A separate report showed that U.S. core consumer price inflation, which excludes food and energy, rose by 0.2% last month, more than the expected 0.1% uptick, after a 0.2% gain in March.
The latest New York manufacturing Index also offered support by coming in at a new two-year high of 19.01 in May.
The figure was well above analyst expectations for a rise to 5.00.
Against the Euro the Canadian Dollar edged higher after the single currency came under sustained pressure from weaker than forecast GDP data and increased expectations that the European Central Bank will introduce new monetary easing measures at next month’s monetary policy meeting.
Pound to Canadian Dollar update – 16/05/2014
On Friday Pound movement was limited due to a lack of UK news, but the GBP/CAD pairing still recovered losses during European trading.
Sterling came under considerable pressure on Wednesday after UK wage growth data showed less of an increase than forecast and the Bank of England delivered a dovish inflation report.
While the Pound largely held these declines on Thursday, and slid against the ‘Loonie’ in response to upbeat Canadian reports, the British asset adopted a firmer footing before the weekend.
The GBP/CAD pairing posted a notable decline overnight as the surprisingly upbeat Canadian manufacturing shipments and existing home sales data had a positive impact.
The unexpected 0.4 per cent increase in manufacturing shipments was particularly welcome given the difficulties the sector has been experiencing, but industry experts remain cautious.
According to economist Jonathan Bendiner; ‘Competitive challenges do remain for the sector. The recent Bank of Canada Monetary Policy Report highlighted how a loss of US market share by non-commodity Canadian exporters has contributed to the recent disconnect between rising foreign demand and non-commodity export performance. The bank’s base case projections continue to assume that non-commodity exports will grow at a somewhat slower pace than foreign demand.’
While the Canadian Dollar initially spiked after this report was released the currency pared gains as investors turned from higher-risk assets in response to concerning economic reports from the Eurozone and US.
The GBP to CAD pairing took advantage of the situation and advanced, holding gains into North American trading on Friday.
The appeal of the ‘Loonie’ also lessened as commodity prices fluctuated and a report showed that foreign investors cut their holdings of Canadian securities in March. This was the first decline in three months.
With Canadian retail sales and consumer price inflation figures due for release next week, considerable Pound to Canadian Dollar movement can be expected.
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,0.5464,
Canadian Dollar,,US Dollar,0.9195,
Canadian Dollar,,Euro,0.6705,
Canadian Dollar,,Australian Dollar,0.9821,
Canadian Dollar,,New Zealand Dollar,1.0582,
US Dollar,,Canadian Dollar ,1.0898,
Pound Sterling,,Canadian Dollar,1.8307,
Euro,,Canadian Dollar,1.4914,
Australian Dollar,,Canadian Dollar,1.0176,
New Zealand Dollar,,Canadian Dollar,0.9399,
[/table]
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