Pound (GBP) Takes Advantage of Weakened Canadian Dollar (CAD)
The Pound Canadian Dollar exchange rate has continued rising today after advancing by around three cents last week as the ‘Loonie’ was struck by poorly performing domestic data.
This was the first weekly gain for GBP CAD in over a month as ‘Brexit’ sentiment has weighed heavily on the Pound in recent weeks following the announcement that the UK would invoke Article 50 of the Lisbon Treaty by the end of March 2017.
However the Pound’s gains today have been muted by a poor CBI industrial trends orders report, which fell drastically short of a predicted rise to -4 and instead plummeted to -17 in October, reaching the lowest point in eight months.
Today’s announcement that Microsoft would be rising the prices of some of it business products has done little to improve market sentiment in the Pound as the low value of Sterling begins to increase costs for UK companies.
Canadian Dollar (CAD) Tumbles Following Economic Slowdown
The Canadian Dollar was battered at the end of last week as the majority of Canadian ecostats showed that the economy receded in the previous month, causing traders to abandon CAD in fears that the Bank of Canada (BoC) may have been contemplating slashing interest rates in response to the slowdown.
The unexpected rise in Canadian wholesale sales from 0.6% to 0.8% should help to alleviate investor fears that the BoC may be looking to make further rate cuts.
However the Canadian Dollar is still struggling today following a drop in oil prices as Iraq said it wanted to be exempt from an OPEC deal to curb global production, throwing the whole plan into question. With oil being one of Canada’s key exports, any drop in crude prices has a major effect on the ‘Loonie’
GBP CAD Forecast: ‘Brexit’ Sentiment Likely to Dictate Exchange Rate
The Pound to Canadian Dollar exchange rate may continue rising if British data preforms better than expected this week, especially with Thursday’s GDP report, which is currently forecast to remain at 2.1% on the year.
More likely however is that GBP CAD will be driven by comments on ‘Brexit’ as Sterling becomes an increasingly pollicised currency. Meanwhile, the Canadian Dollar is like to be beholden to oil prices as it only has a single low impact data release remaining this week.
Current Interbank Exchange Rates
At the time of writing the GBP/CAD exchange rate was trending around 1.63 and the CAD/GBP exchange rate was trending around 0.61.
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