After putting on a valiant display over the last few days, the Canadian Dollar gave up hard-fought gains against the Pound and US Dollar as investors braced themselves for the Federal Open Market Committee announcement and turned from higher-risk assets.
The Canadian Dollar Exchange Rate was in the region of 0.6078 against the British Pound as of 15:05 GMT
Better-than-forecast domestic data, coupled with Fed speculation, saw the ‘Loonie’ approach a month-high against its US counterpart and helped the commodity-driven asset strengthen to 0.6113 against the Pound yesterday.
However, with the Fed announcement drawing closer the Canadian Dollar declined for the first time in three days.
The slump in the CAD/GBP pairing was also the result of the unified tone adopted in the Bank of England’s meeting minutes.
It seems that after a couple of months of divided opinion, all nine members of the Monetary Policy Committee are now in agreement when it comes to maintaining the current level of asset purchases. The Bank of England also commented that ‘there were increased signs that the recovery was taking hold’, which further benefited the Pound.
However, the CAD/GBP pairing could be on the precipice of recovering losses. According to strategist Karen Jones; ‘There are enough warning signals to suggest that this is the time to exit long-Sterling positions.’
The CAD/GBP exchange rate hit a low of 0.6067
Conversely, the CAD/USD pairing could be in line to extend declines in the hours and days following the FOMC statement.
Some industry experts believe that if the Fed opts to taper stimulus by the 10-15 billion Dollars expected the ‘Loonie’ will drop as traders have failed to fully price in the event.
As summarised by global foreign strategist Greg Anderson; ‘The Loonie’s going to weaken by a percent to a percent and a half. Our central scenario is for 10 billion Dollars of tapering. It’s hard for investors to take a stand on this. For the most part, investors have tried to square up rather than position for it.’
Tomorrow UK retail sales are likely to inspire additional CAD/GBP movement.
Current Canadian Dollar (CAD) Exchange Rates:
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The Canadian Dollar/US Dollar Exchange Rate is currently in the region of: 0.9699 <
The Canadian Dollar /Euro Exchange Rate is currently in the region of: 0.7268 <
The Canadian Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6078 <
The Canadian Dollar/Australian Dollar Exchange Rate is currently in the region of: 1.0376 <
The Canadian Dollar /New Zealand Dollar Exchange Rate is currently in the region of: 1.1799 >
The Pound Sterling/Canadian Dollar Exchange Rate is currently in the region of: 1.6452 >
The US Dollar/ Canadian Dollar Exchange Rate is currently in the region of: 1.0310 >
The Euro/Canadian Dollar Exchange Rate is currently in the region of: 1.3749 <
The New Zealand Dollar/Canadian Dollar Exchange Rate is currently in the region of: 0.8474 >
The Australian Dollar/Canadian Dollar Exchange Rate is currently in the region of: 0.9637 >
(Correct as of 15:05 GMT)
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