The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate has fallen dramatically today and Sterling (GBP) has otherwise declined across the board due to the Bank of England (BoE) making an extremely cautious forecast for the future of the UK economy.
GBP/CAD Exchange Rate News: BoE Downgrade Erases Sterling’s Prospects Today
The Pound Sterling (GBP) has declined against all of the competition today, with a loss of -0.8% against the Canadian Dollar (GBP/CAD) being one of the smaller declines seen today. Greater have been -1% against the Euro (GBP/EUR) and the US Dollar (GBP/USD), -1.2% against the Australian Dollar (GBP/AUD), -1.4% against the South African Rand (GBP/ZAR) and -1.6% against the New Zealand Dollar (GBP/NZD).
In brief, the BoE has been almost entirely responsible for Sterling’s catastrophic downfall today. The central bank’s decision to freeze the interest rate at 0.50% came along with the forecast from the bank that UK inflation would remain below 1% until the second half of 2016. Adding insult to injury, the bank downgraded its UK growth predictions for the coming year as well.
Calum Bennie, a Savings Expert at Scottish Friendly, denounced BoE Governor Mark Carney as the ‘boy who cried wolf’ following the news, given Carney’s previous attitude that an interest rate hike could be due early next year; some economists pushed their expectations all the way ahead to 2017 in response.
Scarcely Better Performance for CAD Today as PMI Result Disappoints
The Canadian Dollar (CAD) has declined in value today, although the rise of 0.9% against the Pound Sterling (CAD/GBP) has been something of a highpoint. Elsewhere, the ‘Loonie’ has fallen by -0.4% against the Australian Dollar (CAD/AUD) and by -0.7% against the New Zealand Dollar (CAD/NZD).
The root of the problem has been low prices for resources such as crude oil and gold and a dip from 53.7 points to 53.1 in the Ivey Purchasing Managers Index for October, which had been forecast to rise to a score of 54.
Exchange Rate Forecast: Strong Data Day for GBP and CAD Due Tomorrow with Production and Unemployment Figures
While today has been undeniably bad for the Pound Sterling (GBP), tomorrow will present another opportunity for a UK currency rise. Ideally, this would come from a positive outcome for the UK Industrial and Manufacturing Production figures for September, as well as the Trade Balance results for the same month. However, if these match with forecasts and fail to show major signs of improvement then the later NIESR GDP Estimate for October could provide some light relief to investors in the Pound.
Canada’s releases are fewer but arguably of greater importance, as the Net Change in Employment, Unemployment Rate, Building Permits and Full Time Employment Change results for October and September are scheduled for release. At the time of writing, predictions were optimistic for the outcome of the Net Change and the Building Permits, but the Unemployment Rate was expected to remain at 7.1% and no forecasts had been made for the actual Full Time Change.
Current GBP, CAD Exchange Rates
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate was trending in the region of 2.0109 and the Canadian Dollar to Pound Sterling (CAD/GBP) exchange rate was trending in the region of 0.4979 today.
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