The Pound Sterling to US Dollar (GBP/USD) and Pound Sterling to Canadian Dollar (GBP/CAD) exchange rates were both trending lower in Wednesday’s European trading ahead of US Industrial and Manufacturing Production figures and the Bank of Canada’s (BOC) interest rate decision.
The Canadian Dollar could be in for an interesting day of movement with speculation surrounding the BOC decision likely to heat up ‘Loonie’ fluctuations in the North American session.
The Bank of Canada recently cut interest rates from 1.0% to 0.75% after remaining on hold for four years. However, some experts are suggesting that another cut could be on the way while others believe it’s likely that rates will remain stable.
Royal Bank of Canada economist Eric Lascelles stated: ‘It’s still more likely that Bank of Canada remains on hold. There isn’t quite enough evidence for that further cut.’
The surprise move taken by the bank in January was intended to be unaccompanied by another cut until the BOC could reassess the economy, but as we enter mid-April, will any decisions for the outlook of the Canadian economy be made?
Economist Benjamin Reitzes commented: ‘The Bank believes the January cut brought them time to wait and see. January’s shock cut shows he’s not afraid to surprise the market, so you can’t rule out a move.’
Meanwhile, Canadian Existing Home Sales and Manufacturing Sales stats will also be out on Wednesday and are all in the mix for potential Canadian Dollar to Pound Sterling (CAD/GBP) and Canadian Dollar to US Dollar (CAD/USD) exchange rate movement.
US Dollar (USD) Forecast to Fluctuate on US Inflation Stats
The US Dollar is gearing up for a hefty end to the week with the release of several important data pieces yet to come.
Today is likely to be a moderate day for movement with US Manufacturing Production and Industrial Production figures scheduled for publication, followed by the NAHB Housing Market Index.
Furthermore, world economic leaders are due to meet in Washington today and could potentially create movement in the currency market. US Federal Reserve officials are also expected to make appearances in various states and any hawkish comments could enable the US Dollar to rally.
Thursday will be another medium influence day with the release of US Building Permits, Housing Starts, Initial Jobless Claims, Continuing Claims and Philadelphia Federal Reserve Index.
However, Friday’s going to be the main day for US Dollar exchange rate fluctuations with the release of the US Consumer Price Index. Any fall in inflation could pressure the US Dollar to Pound Sterling and US Dollar to Canadian Dollar (USD/CAD) exchange rates lower.
Pound Sterling to US Dollar (GBP/USD) and Canadian Dollar (GBP/CAD) Exchange Rate Forecast
The Pound Sterling to US Dollar (GBP/USD) and Pound Sterling to Canadian Dollar (GBP/CAD) exchange rates will also be in for an interesting day on Friday on account of UK and Canadian developments.
The Bank of Canada (BOC) will release its latest Canadian Consumer Price Index (CPI) and as with the US, a fall in inflation could translate into weakness for the Canadian Dollar to Pound Sterling (CAD/GBP) and Canadian Dollar to US Dollar (CAD/USD) exchange rates.
Meanwhile, UK Unemployment Rate, Employment Change and Average Weekly Earnings figures are likely to put a cat amongst the pigeons and cause some major Pound Sterling movement. A healthy labour market could lead investors to forecast a quicker interest rate hike by the Bank of England (BoE) and bolster the Pound significantly.
The Pound Sterling to US Dollar (GBP/USD) exchange rate is trading at 1.4720. The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate is trending in the region of 1.8439.
