Over the course of European trading the Pound declined against the majority of its most traded currency counterparts in response to disappointing UK employment figures.
For the first time since February last year, the UK unemployment rate rose, edging from 7.1 per cent to 7.2 per cent in the three months through December.
Although recent reports for the UK have been fairly upbeat, they do seem to suggest that the nation’s economic recovery is slowing from the rapid pace of improvement seen in the second half of last year.
Although the Bank of England has adopted a new forward guidance policy, one which doesn’t link interest rates increases to the unemployment rate, the result still saw the Pound decline.
In the opinion of economist Howard Archer; ‘The recent rate of improvement in the labour market has been both impressive and surprising, but we are dubious that unemployment will keep falling at such a rapid rate. We anticipate that employment growth will increasingly be limited by increasing productivity as many companies are able to make greater use of the workers they already have.’
Sterling drifted lower following the report’s publication.
However, the Pound later clawed back losses against the Canadian Dollar as the appeal of the commodity-driven currency was dented by the news that Canadian wholesale sales fell by 1.4 per cent in December, month-on-month, rather than slipping by 0.4 per cent as forecast. November’s decline was negatively revised to 0.2 per cent.
Meanwhile, Canada asserted that it intends to sell a US Dollar bond in order to strengthen currency reserves and hit foreign exchange demands.
Canada hasn’t issued a global US Dollar benchmark since the beginning of 2012.
Tomorrow GBP/CAD movement may be limited (although UK CBI trends figures will be of interest) but with UK retail sales figures and Canadian inflation data due out on Friday the end of the week could be volatile.
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,0.5424,
Canadian Dollar,,US Dollar,0.9086,
Canadian Dollar,,Euro,0.6589,
Canadian Dollar,,Australian Dollar,1.0036,
Canadian Dollar,,New Zealand Dollar,1.1030 ,
US Dollar,,Canadian Dollar ,1.1016,
Pound Sterling,,Canadian Dollar,1.8452,
Euro,,Canadian Dollar,1.5180,
Australian Dollar,,Canadian Dollar,0.9963,
New Zealand Dollar,,Canadian Dollar,0.9109,
[/table]
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