The Pound Sterling (GBP) to Canadian Dollar (CAD) exchange rate softened on Wednesday as economic data showed that manufacturing production in both the UK can Canada slowed in September.
The ‘Loonie’ was able to tick higher against the Pound however as it followed its US relation higher and as Canada’s Purchasing Managers Index (PMI) eased but remained close to the nine-month high seen in August.
Earlier in the session, the Pound softened after the Markit Manufacturing PMI expanded at its slowest pace in 17 months. The PMI dropped to a reading of 51.6 last month, down from the 52.2 figure recorded in the preceding month of August. Analysts had expected the PMI to increase to rise to a reading of 52.5.
The report increased speculation that the Bank of England may cause policy makers to grow cautious as to whether the UK economy is ready for higher interest rates.
The softer PMI was blamed on the continuing weakness occurring in the Eurozone.
‘After a promising start to the third quarter the growth of output and new orders continues to slow bringing a subdued outlook to the end of the quarter. Although the sector is still expanding, manufacturers are holding off raising investment levels until the economic picture, in particular the way forward on interest rates, becomes clearer. That said, it is crucial that the sector continues to invest in new product lines, innovation and manufacturing efficiencies,’ said Mike Rigby, head of manufacturing at Barclays.
Pound Sterling to Canadian Dollar Exchange Rate Eases
The Canadian Dollar managed to edge higher against the Pound despite a report showing that the pace of growth in the Canadian manufacturing sector eased last month as production slowed and new export orders slipped.
According to the RBC Canadian Manufacturing Purchasing Managers Index (PMI), business conditions in the North American country slipped from Augusts 9-month high of 54.8 to a seasonally adjusted figure of 53.5 in September.
‘As we progress into the final months of 2014, we expect further strengthening in the US economy will augment Canadian exports and set the stage for solid manufacturing business conditions overall,’ said Craig Wright, the chief economist at RBC.
The report also showed that the sector was continuing to create jobs at a steady pace in September with employment growth easing only slightly from Augusts’ 11-month high.
The Pound could push higher against the ‘Loonie’ in Thursday’s session if the latest Construction PMI report comes in positively.
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,0.5513 ,
Canadian Dollar,,US Dollar,0.8951 ,
Canadian Dollar,,Euro,0.7087 ,
Canadian Dollar,,Australian Dollar,1.0238,
Canadian Dollar,,New Zealand Dollar,1.1390 ,
US Dollar,,Canadian Dollar,1.1185 ,
Pound Sterling,,Canadian Dollar,1.8153 ,
Euro,,Canadian Dollar,1.4108 ,
Australian Dollar,,Canadian Dollar,0.9750 ,
New Zealand Dollar,,Canadian Dollar,0.8744 ,
[/table]
