The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate was trending within a tight range on Tuesday afternoon.
After British economic data produced mixed results, the Pound fluctuated versus its major peers. A slight depreciation can be linked to cooling core inflation and political uncertainty as we draw ever closer to the general election.
The Canadian Dollar, meanwhile, softened versus many of its most traded currency competitors despite comparatively positive data results and rising oil prices. The declination is likely to be as a result of tracking US Dollar losses after US data failed to impress.
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate is currently trending in the region of 1.8473.
Pound Sterling (GBP) Exchange Rate Fluctuates on Mixed Data
UK economic data produced varied results on Tuesday, which caused the Pound to fluctuate versus its most traded currency rivals. BRC Like-for-Like Sales increased by 3.2% on the year in March, significantly bettering the median market forecast growth of 0.5%. March’s Consumer Price Index equalled the market consensus of 0.0% on the year, sothe UK avoided deflation for the second consecutive month. The yearly Core CPI, however, only registered 1.0% growth in March, which was under the forecast growth of 1.2%.
Allan Monks of JP Morgan said there is a decent chance UK inflation will inch up this month; ‘With petrol prices having risen in April, the currency falling, utility bill cuts largely passed through, and global agricultural commodity prices having stabilized, headline inflation could rise to 0.1% in April even as core weakens. We still see downside risk to our forecast for headline inflation, but March may have marked the trough in headline.’
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate has fallen to a low of 1.8387.
Canadian Dollar (CAD) Exchange Rate Softens on US Dollar Weakness
After domestic data printed positively, and with oil prices advancing, the ‘Loonie’ (CAD) ought to have appreciated versus its major peers. On the year, March’s Teranet/National Bank HPI increased by 4.7% which bettered the previous figure of 4.4%. On the month, Teranet/National Bank HPI increased by 0.3% in March. In addition, the Teranet/National Bank HP Index advanced from 167.52 to 168.01 in March.
The ‘Loonie’ depreciation can be attributed to the currency tracking US Dollar losses. After US Advance Retail Sales failed to meet with the median market forecast growth, the ‘Greenback’ (USD) softened versus the vast majority of its most traded currency rivals.
Pound Sterling to Canadian Dollar (GBP/CAD) Exchange Rate Forecast to Strengthen
Given that the Canadian Dollar is softening irrespectively of commodity price shifts and domestic data, there is a high likelihood that the Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate will edge higher over the remainder of the European session.
Wednesday will be particularly important for those invested in the Canadian Dollar with the Bank of Canada (BOC) interest rate decision and accompanying report scheduled for release. A lack of British data should see the Pound decline amid political uncertainties.
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate climbed to a high of 1.8510 today.
