Pound Sterling to Canadian (GBP/CAD) Dollar Exchange Rate at three-day low

The Pound fell to its lowest in three days against the Canadian Dollar after the release of Canadian inflation data.

The ‘Loonie’ firmed moderately against the majority of its major peers after data showed that domestic annual inflation rate increased as expected in April.

The Bank of Canada has been concerned over the pace of inflation in recent weeks and Friday’s data showed that annual rate of inflation increased to the banks 2% target for the first time in two years. As a result the ‘Loonie’ strengthened against the Pound, US Dollar and Euro.

So far this month the Canadian currency has traded relatively sideways as investors weigh up recent economic data releases with the Bank of Canada’s neutral monetary policy.

The currencies gains are likely to be short-lived as the BoC does not want the currency to increase too much as it will impact upon exporters and harm the economy.

The ‘Loonie’ also made gains against the US Dollar.

“So all in all, we’re likely to see the Canadian Dollar trade in a fairly tight range. I think we’re either side of C$1.10. We’re sitting a little bit stronger than that right now, but I think we’ll be either side of C$1.10 for the next couple of months,” said Camilla Sutton, chief currency strategist at Scotiabank in Toronto.

Against the Euro the ‘Loonie’ advanced to its highest level in five-months as weaker-than-forecast data in the Eurozone increased speculation that the European Central Bank will introduce new monetary easing measures in June.

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,0.5461 ,
Canadian Dollar,,US Dollar,0.9195 ,
Canadian Dollar,,Euro,0.6748 ,
Canadian Dollar,,Australian Dollar,0.9963,
Canadian Dollar,,New Zealand Dollar,1.0736 ,
US Dollar,,Canadian Dollar,1.0878 ,
Pound Sterling,,Canadian Dollar,1.8318 ,
Euro,,Canadian Dollar,1.4823 ,
Australian Dollar,,Canadian Dollar,1.0047 ,
New Zealand Dollar,,Canadian Dollar,0.9288 ,

[/table]