Monthly UK Trade Figures Better-than-Anticipated; Quarterly Figures Worrying
While December’s Trade Balance figures printed better-than-expected, a revision in the November’s deficit upwards from -£3.1 billion to -£4 billion means that the UK’s quarterly and annual figures do not paint a positive picture. The overall trade deficit for 2015 has widened to the largest level on record, increasing -£1.9 billion to hit -£125 billion. The news has seen Pound Sterling fall, even though investors were originally heartened by the positive monthly figures.
Pound (GBP) Still Weak Despite British Retail Consortium Sales Figures
Like-for-Like Sales in the UK have performed far better-than-expected in January. The latest printing of 2.6% far eclipses the 0.3% rise forecast and represents a huge jump on the previous reading of 0.1%.
Earlier…
NHS overspend and ‘Brexit’ uncertainty are once again sinking Pound Sterling (GBP), softening the GBP/CAD exchange rate. The Canadian Dollar (CAD) is advancing on oil hopes.
UK Budget and Eurozone Membership in Doubt: GBP/CAD Plummets
Two further blows for George Osborne’s budget targets have been delivered today. First has been the news that London’s largest NHS trust has drastically overspent its budget, racking up a deficit of more than £110 million, the largest in NHS history. The second concern is a warning from the Institute for Fiscal Studies (IFS), which has claimed the Chancellor could have trouble hitting his target of a budget surplus in the 2019/20 fiscal year.
According to the IFS, ‘Last week’s Bank of England inflation report downgraded forecast average earnings by more than 1% just since November. If average earnings do rise 1% less by 2019–20 than the November forecast, he [George Osborne] could expect to lose £5bn of income tax and National Insurance revenues. The fall in equity prices seen just since the spending review could, unless it proves purely temporary, cost the government £2bn in lower capital tax receipts in 2020.’
Unsurprisingly, fears over the potential of a ‘Brexit’ have failed to abate, with a speech by Prime Minister David Cameron later today expected to contain serious warnings over the potential security threats of leaving the European Union. According to Cameron, in the event of a ‘Brexit’ France could prevent UK officials from conducting border checks at Calais, meaning the migrant camp currently located there could end up moving to the south east of England.
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate is currently trading in the region of 2.0053.
Canadian Dollar to Pound Sterling (CAD/GBP) Exchange Rate Bullish on Building Rumours of OPEC Meeting
The potential of a meeting between members of the Organization of Petroleum Exporting Countries to discuss curbing oil prices has taunted the ‘Loonie’ over the past few weeks. There have been many claims and several attempts to backtrack by various members of OPEC, as well as Russia, but according to Venezuela six oil-producing nations, including Russia, Oman, Iran and Iraq currently support a meeting.
While the prospect of higher prices as a result of producer cutbacks may be increasing ‘Loonie’ appetite, the actual price of oil at present is weakening it. Once again Brent Crude is on the decline, falling from US$35 per barrel; a level it seems unable to break through or hold for an extended period of time. While Brent prices remain around monthly highs, another dip towards US$30 has reminded investors of the volatility of the markets and dashed hopes of a permanent recovery.
The Canadian Dollar to Pound Sterling (CAD/GBP) exchange rate is currently trading between 0.4953 and 0.4986.
Pound Sterling to Canadian Dollar (GBP/CAD) Exchange Rate Forecast: Quiet Data Week for ‘Loonie’ Leaves Pound in Charge
After today’s Canadian Building Permits data there is little due out from Canada until Thursday, when the New House Pricing Index is released. It’s a fairly sluggish week for the UK as well, although with Trade Balance data on Tuesday and production figures on Wednesday, there is plenty to drive investor sentiment towards Pound Sterling.
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate is currently trading between 2.0032 and 2.0171.
Comments are closed.