- Bank of England (BoE) freezes UK interest rate at 0.5% for 85th consecutive month
- Pound Sterling drops in value due to increased turbulence forecast by BoE
- Canadian Dollar fluctuates on commodity price movements
- Scattering of UK and Canadian data due before weekend
The Pound (GBP) has largely tanked against its peers today, owing to the monthly BoE decision not providing much for investors to appreciate.
The Canadian Dollar (CAD) has had a more mixed faring, with gains mostly overriding other losses and narrow trends.
UK Economic News: Bank of England Interest Rate Decision Outcome Expected
The Pound Sterling (GBP) has been a poor prospect among investors today, having dropped by -0.2% against the Canadian Dollar (GBP/CAD), the Euro (GBP/EUR), the US Dollar (GBP/USD) and by -0.9% against the Australian Dollar (GBP/AUD).
Sterling’s losses have primarily been triggered by the outcome of this month’s BoE interest rate decision, which matched with forecasts by remaining frozen at 0.5%.
The minutes were largely a repeat of previous entries, with the central bank voicing its concern about a global economic slowdown and the turbulence likely to be caused by the increasing approach of the UK Referendum.
Although the recent inflation rate positivity led to a handful of economists making optimistic predictions, this current status quo response is in line with other estimates that the BoE won’t be touching the interest rate until after the June 23rd UK Referendum vote.
Elsewhere, with Labour party leader Jeremy Corbyn taking the corner for the ‘In’ campaign with a notable speech today, investor concerns regarding the referendum vote have been partially alleviated.
Canadian Dollar (CAD) Positive Overall after Prior BOC Comments
The Canadian Dollar (CAD) has generally appreciated against its peers today, although alongside gains of 0.3% against the Pound Sterling (CAD/GBP) and 0.7% against the New Zealand Dollar (CAD/NZD) have been a loss of -0.6% against the Australian Dollar (CAD/AUD) and a narrow gain on the Euro (CAD/EUR).
The Canadian currency has mainly been shifted today by the house price index for February, which has shown a rise from 0.1% to 0.2% on the month and a repeat printing at 1.8% on the year.
Other sources of influence have included the price of crude oil and gold; the former has risen marginally while the latter has made a more pronounced downward dive.
A potential cause for the continuing level of investor support for the ‘Loonie’ may be yesterday’s Bank of Canada (BOC) comments, which were given by Governor Stephen Poloz in the wake of the BOC’s decision to leave the interest rate at 0.5%.
The general tone of the comments was positive, with the central bank issuing the statement that:
‘It does appear that the positive forces at work in the economy are starting to outweigh those that are negative. First-quarter GDP growth appears to have been unexpectedly strong’.
Future GBP and CAD Forecast: Canadian Housing Stats due soon, UK Construction Info out Tomorrow
The remainder of the week is set to bring a number of UK and Canadian ecostats, although only the Canadian printings are expected to cause notable movement for the GBP/CAD exchange rate.
Tomorrow morning will be the Canadian national manufacturing shipments outcome for February, along with the March existing home sales figure. The only forecast made at present has been for a dip from 2.3% to -1.5% for the former field.
On the UK side of things, the only expected economic announcement due before the close of the European trading session tomorrow will be the seasonally adjusted construction output figures for February, which are expected to be announced tomorrow morning.
Forecasts have been for an improvement on the month and the year, from -0.2% to 0% and from -0.8% to 0.7% respectively.
Current GBP, CAD Exchange Rates
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate was trending in the region of 1.8135 and the Canadian Dollar to Pound Sterling (CAD/GBP) exchange rate was trending in the region of 0.5519 today.
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