Yesterday might have been comparatively quiet as far as currency market movement goes, but as European trading progressed the Pound softened against the ‘Loonie’ as a result of UK data.
Sterling posted widespread declines as UK inflation figures came in below estimated levels, reducing the appeal of the British asset.
For the first time since November 2009, UK inflation came in below the Bank of England’s 2 per cent target.
The 1.9 per cent annual reading for January defied expectations for no change.
Separate figures showed a 0.3 per cent month-on-month decline in the UK’s retail price index (slightly less than the 0.4 per cent drop expected) and a non-seasonally adjusted decline of 0.9 per cent in the nation’s producer price index at the start of 2014.
While UK bonds climbed as a result of the data the Pound broadly weakened.
As one industry expert noted; ‘The gilt market liked the inflation number. Inflation pressures are still very muted and the strong exchange rate is playing into this.’
The commodity-driven Canadian Dollar’s gains were limited as the price of gold fell from a three-month high as markets recovered from the President’s Day holiday, although crude-oil futures hovering at elevated levels did lend the ‘Loonie’ some support.
The CAD/GBP pairing was little changed following the release of data which showed that Canadian international securities transactions declined by 4.28 billion Canadian Dollars in December following an increase of 9.07 billion Dollars in November.
Tomorrow’s UK employment figures and the publication of minutes from the Bank of England’s latest policy meeting will have an impact on the GBP/CAD exchange rate.
Canadian news to look out for in the days ahead includes wholesale sales and CPI figures. The influential Canadian inflation data isn’t due for release until Friday so ‘Loonie’ movement may be a little subdued until then.
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,0.5463,
Canadian Dollar,,US Dollar,0.9118,
Canadian Dollar,,Euro,0.6628,
Canadian Dollar,,Australian Dollar,1.0099,
Canadian Dollar,,New Zealand Dollar,1.0950 ,
US Dollar,,Canadian Dollar ,1.0968,
Pound Sterling,,Canadian Dollar,1.8320,
Euro,,Canadian Dollar,1.5083,
Australian Dollar,,Canadian Dollar,0.9903,
New Zealand Dollar,,Canadian Dollar,0.9143,
[/table]
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