The Pound (GBP) was little moved from a near six-month low against the Canadian Dollar (CAD) on Friday as economists chose to focus on the evenings Jackson Hole Symposium and despite Canadian Consumer Price Data disappointing.
With a lack of domestic market moving data due for the Pound, the UK currency was experiencing muted trading against the majority of its most traded peers on Friday.
Sterling continued to be under some pressure however from the publication of disappointing Retail Sales data published on Thursday.
The weaker than expected data combined with Monday’s inflation data that also came in below expectations.
It caused economists to lower their bets that the Bank of England (BoE) will raise interest rates before the end of the year.
Following the retail sales report the Pound weakened broadly and came close to a six-month low against the Canadian Dollar, a position that it stayed at on Friday.
The ‘Loonie’ softened against several peers but downward movement was restrained after the Canadian Government released a report, which showed that the North American nation’s inflation rate slowed for the first time in five months in July.
According to the Ottawa based Statistics Canada the nation’s Consumer Price Index increased by 2.1% on a year on year basis from June’s figure of 2.4%. The figure was worse than the 2.2% forecast by economists.
‘Inflation falling in Canada certainly takes the pressure off of the Bank of Canada (BoC) to react to that in terms of monetary policy and tightening rates. The timing of a Bank of Canada rate hike gets pushed back further into 2015,’ said the executive director of foreign exchange at Canadian Imperial Bank of Commerce in a phone interview with Bloomberg.
Annual core inflation, watched carefully by the Bank of Canada, drifted farther from the central bank’s target to 1.7% from 1.8%. It had been predicted to inch up to 1.9%.
Losses because of the inflation report were restrained after a separate report showed that retail sales increased by 1.1% in June, beating forecasts for an increase of 0.6% and adds to the 0.9% increase recorded in May.
Pound Sterling to Canadian Dollar Exchange Rate Forecast
The rise in sales marks a sixth consecutive increase but despite that the ‘Loonie’ was unable to make gains as the market’s attention was fixed on the conference of the world’s leading Central Bankers taking place at Jackson Hole.
Federal Reserve Chairman Janet Yellen is due to give a speech at the symposium later in the day.
If her comments are dovish than the US Dollar is likely to weaken and as such could allow its Canadian relation to strengthen.
A more hawkish speech however and the ‘Loonie’ and Pound will both decline against the ‘Greenback’.
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,0.5509 ,
Canadian Dollar,,US Dollar,0.9136 ,
Canadian Dollar,,Euro,0.6884 ,
Canadian Dollar,,Australian Dollar,0.9799,
Canadian Dollar,,New Zealand Dollar,1.0878 ,
US Dollar,,Canadian Dollar,1.0940 ,
Pound Sterling,,Canadian Dollar,1.8149 ,
Euro,,Canadian Dollar,1.4521 ,
Australian Dollar,,Canadian Dollar,1.0196 ,
New Zealand Dollar,,Canadian Dollar,0.9216 ,
[/table]
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