With an absence of Canadian economic data on Friday the ‘Loonie’ (CAD) has experienced relatively minimal volatility; holding steady by tracking US Dollar progress. Sterling has softened fractionally following the surge in demand off the back of Bank of England Governor Mark Carney’s hawkish speech on Thursday.
The Pound Sterling to Canadian Dollar exchange rate is currently trending in the region of 1.8109.
After Bank of England Governor Mark Carney gave a speech on Thursday Sterling appreciated against all sixteen of its major traded currency competitors. The hawkish speech outlined the possibility of a sooner-than-expected benchmark rate increase, and Carney said that nearly all of the conditions for normalising monetary policy have now been met.
The Canadian Dollar began Thursday’s London session in a relatively weak position as the result of a statement given by Bank of Canada deputy Governor Timothy Lane. Lane suggested that the ‘Loonie’ could potentially weaken and market interest rates may climb when the Federal Reserve normalises monetary policy. ‘Like the Fed, we will balance the risks of acting too soon and stifling burgeoning economic growth against the risks of acting too late and letting inflation overshoot and fuelling imbalances in our housing markets’.
With an absence of Canadian data on Thursday the ‘Loonie’ tracked the progress of the US Dollar which enabled it to hold in a relatively strong position against many of its peers.
The Pound Sterling to Canadian Dollar exchange rate has hit a low today of 1.8082.
Friday’s British economic data has printed relatively poorly, although not enough to rock Sterling off its high perch. The Hometrack Housing Survey declined by 0.1% in September with a yearly declination from 5.5% to 5.0%.
Any significant Sterling losses on Friday can be attributed to growing concerns over the possibility of British military action to combat Isis terrorists in Iraq and Syria.
The Canadian economic calendar has been particularly sparse this week, and Friday is no exception with a complete absence of Canadian domestic data publications. As geopolitical tensions mount traders tend to pull away from risk-sensitive assets in favour of safe-haven currencies. The Canadian Dollar, however, has managed to avoid any huge decline as it tracks the progress of its cross-border neighbour.
Forecast for the Pound to Canadian Dollar Exchange Rate
Friday’s US data has printed reasonably positively which could see the Canadian Dollar curtail any potential losses from the lack of data. However, if geopolitical tensions elevate there is the distinct possibility that the Canadian Dollar will drop as a result of risk aversion.
Sterling is likely to hold in a relatively strong position over the weekend. A dramatic fall is possible, however, if traders disagree with the British parliament’s decision on military action.
The Pound Sterling to Canadian Dollar exchange rate has reached a high today of 1.8154.
