The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate climbed by around 0.43% on Friday morning.
Although disappointing retail sales saw the Pound slump on Thursday, Friday has seen Sterling recover losses after traders feared the declination was overdone. Political uncertainties ahead of the general election are certainly weighing on investor confidence, but expectation that the Bank of England (BoE) will hike the cash rate after the elections conclusion is keeping the Pound ticking higher.
The Canadian Dollar, meanwhile, softened versus many of its major peers as a result of tracking US Dollar losses. Additional depreciation can be linked to speculation that Bank of Canada (BOC) Governor Stephen Poloz will give a dovish speech in Washington later on Friday.
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate is currently trending in the region of 1.8359.
Yesterday…
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate softened by around -0.62% on Thursday afternoon.
With the forthcoming general election weighing heavily on investor confidence amid fears of a massive policy overhaul, the Pound softened versus many of its major peers. Aiding the declination was disappointing results from British retail sales data.
The Canadian Dollar, meanwhile, strengthened versus some of its major competitors thanks to rising crude prices. The gains have been somewhat sluggish, however, with the US continuing its bearish run after disappointing domestic data.
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate is currently trending in the region of 1.8296.
Pound Sterling (GBP) Exchange Rate Softens on Cool Retail Sales
British economic data produced mixed results on Thursday, but the slump in retail sales was partially offset by positive public borrowing. Public sector Net Borrowing was forecast to rise from 4.8 billion to 6.5 billion, but the actual result rose to 6.7 billion in March. However, March’s Retail Sales declined by -0.5% on the month and Retail Sales including Auto also declined by -0.5% in March.
JP Morgan economist Allan Monks said: ‘Heavy discounting in the retail sector is helping to underpin real spending gains, with scope for further increases to come.’
Philip Shaw, chief economist at Investec, agreed. ‘The latest figures seem to represent a modest break from the relentless surge in sales since last autumn and are not likely to represent a turning point … Our suspicion is that household spending will probably play a more significant role in economic growth further ahead than in the earlier phases of the recovery, although this again might be subject to political developments after 7 May.’
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate has fallen to a low of 1.8286 today.
Canadian Dollar (CAD) Exchange Rate Gains despite Soft US Dollar
After economic data out of the US fell short of expectations once again, the ‘Greenback’ (USD) softened versus the majority of its most traded currency rivals. Ordinarily, the ‘Loonie’ (CAD) would track US Dollar movement, but rising crude prices aided the Canadian Dollar appreciation.
Oil prices strengthened after geopolitical tensions in the Middle East continue to escalate. In addition, reports of cooler US production aided speculation of a price rally. ‘We’ve had a strong shift in sentiment ever since the International Energy Agency report came out last week and highlighted demand growth,’ said Richard Mallinson, an analyst at Energy Aspects.
Pound Sterling to Canadian Dollar (GBP/CAD) Exchange Rate Forecast to Hold Losses
Given the complete absence of domestic data pertaining to either nation to curb the trend, and with crude prices showing little sign of returning to the bearishness, the Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate is likely to hold losses for the remainder of Thursday’s European session.
Friday will likely see cooler GBP/CAD volatility with a complete absence of economic data pertaining to either the UK or Canada.
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate advanced to a high of 1.8431.
