UPDATE
The Pound Sterling to US Dollar (GBP/USD) and Canadian Dollar (GBP/CAD) exchange rates were trending within a limited range on Thursday morning.
As traders await the Bank of England (BoE) rate decision, the Pound is holding steady versus most of its major peers. Although the interest rate decision is likely to be hugely impactful in and of itself, given that the Monetary Policy Committee (MPC) are unlikely to hike at this juncture, the accompanying meeting minutes will be. Should the minutes reveal that one or more policymakers voted for an immediate rate increase the Pound is likely to surge.
With most traders resigned to the idea that the Federal Reserve is likely to delay a benchmark rate hike all the while the global economic situation remains fragile, the US asset is holding a weak position versus its major peers. US labour market data will be of significance today, but the Fed meeting minutes are unlikely to be hugely impactful given the rate decision came prior to data which showed Non-Farm Payrolls weakened considerably.
Although crude oil prices advanced significantly, the Canadian Dollar has seen limited growth after a report from the International Monetary Fund (IMF) warned that commodity-correlated currencies would be hurt by China’s economic slowdown.
The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.5334.
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate is currently trending in the region of 2.0002.
Yesterday…
Pound Sterling to US Dollar (GBP/USD) Exchange Rate Predicted to Hold Gains despite Surge in US Mortgage Applications
The Pound Sterling to US Dollar (GBP/USD) exchange rate advanced by around 0.6% on Wednesday afternoon.
British economic data showed that both Industrial Production and Manufacturing Production bettered the respective median market projections in August. The Pound Sterling strengthened versus nearly all of its major peers in response to the unexpected growth in production. The robust figures are not expected to have a huge impact on Bank of England (BoE) rate hike projections, however, with the Federal Reserve likely to delay a rate hike into 2016. ‘The Bank of England is likely to take some comfort from August’s rebound in industrial production, but it will be concerned by the underlying weakness of manufacturing,’ said Howard Archer, an economist at IHS Global Insight in London. ‘The data are unlikely to hugely change market belief that the BOE will not be raising interest rates before late-2016, although we believe a move in the first half of the year is still very likely and would not rule out a move in February.’
The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.5314.
Despite the fact that US MBA Mortgage Applications surged by 25.5% in the week ending October 2nd, the US Dollar softened versus its major rivals during Wednesday’s European session. The depreciation can be linked to speculation that the Federal Reserve will delay a benchmark rate hike into next year after a report from the International Monetary Fund (IMF) forecast a global growth slowdown. With emerging markets predicted to struggle, led by slowing growth in China, the Fed are unlikely to consider raising rates.
The Pound Sterling to US Dollar (GBP/USD) exchange rate was trending within the range of 1.5221 to 1.5328.
Pound Sterling to Canadian Dollar (GBP/CAD) Exchange Rate Forecast to Advance after Canadian Building Permits Slumped
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate strengthened by around 0.6% on Wednesday afternoon.
In addition to positive domestic data results, the Pound advanced in response to the same IMF report that forecast a global economic slowdown. The IMF stated that the UK has seen robust growth this year compared with other major economies and should be resilient to the projected global slowdown. ‘In the United Kingdom, continued steady growth is expected, supported by lower oil prices and continued recovery in wage growth,’ the IMF said in its latest World Economic Outlook.
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate is currently trending in the region of 1.9981.
Despite the fact that oil prices have hit the highest level since July (after US stockpiles data unexpectedly dropped) the Canadian Dollar softened versus many of its currency peers on Wednesday. The ‘Loonie’ (CAD) depreciation can be linked to poor domestic data which showed August’s Building Permits contracted by -3.7% which was well below the median market projection of a 0.3% increase.
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate was trending within the range of 1.9834 to 2.0005 during Wednesday’s European session.
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