Over the course of local trading the Pound reversed declines against the US Dollar and approached a one-week high against its North American rival as economists bet that Tuesday’s UK retail sales report will show an increase of 0.8 per cent.
If sales are shown to have climbed by 0.8 per cent in January it will be double the 0.4 per cent pace recorded in December and act as a positive sign that the UK’s economic recovery maintained momentum as the New Year got underway.
Sterling also advanced on the Canadian Dollar and retained gains after Canada’s housing starts dropped at twice the rate forecast.
On Friday the ‘Loonie’ rallied as the Canadian economy added considerably more positions than expected in January and the nation’s unemployment rate dropped to 7.0 per cent. However, the commodity-driven currency failed to hold on to those gains over the weekend.
Canada Mortgage & Housing Corp data showed that Canadian housing starts fell at double the rate expected this month.
The 3.7 per cent decline in work in new homes was largely due to a significant decrease in the number of multiple-unit projects.
This data seems to confirm last week’s assertion by Bank of Canada Governor Stephen Poloz regarding the nation’s housing market experiencing a ‘soft landing’.
In the opinion of economist Connor McDonald; ‘A slower pace of construction activity to start the year is consistent with the wider theme of domestic fatigue that will inevitably put more pressure on net exports to drive the next stage of Canada’s economic recovery.’
The Canadian Dollar was also adversely affected by the news that Brent oil fell.
In other Canadian news, Finance Minister Jim Flaherty is preparing to introduce new youth-unemployment busting measures this week. The Minister is also expected to tackle consumer issues within the budget during tomorrow’s announcement.
While BRC retail sales figures for the UK could have an impact on the CAD/GBP pairing tomorrow, major movement may be limited ahead of the release of the Bank of England’s inflation report and Canada’s new housing price index.
Canadian Dollar (CAD) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Canadian Dollar,
,Pound Sterling,0.5518,
Canadian Dollar,,US Dollar,0.9052,
Canadian Dollar,,Euro,0.6639,
Canadian Dollar,,Australian Dollar,1.0132,
Canadian Dollar,,New Zealand Dollar,1.0976 ,
US Dollar,,Canadian Dollar ,1.1062 ,
Pound Sterling,,Canadian Dollar,1.8127,
Euro,,Canadian Dollar,1.5063,
Australian Dollar,,Canadian Dollar,0.9869,
New Zealand Dollar,,Canadian Dollar,0.9143 ,
[/table]
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