Pound Sterling to Canadian Dollar (GBP/CAD) Exchange Rate Forecast to Trend within a Limited Range as Corrective Sterling Trading Ends
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate was trending within a tight range on Friday afternoon.
This week the British Pound advanced versus most of its major peers irrespective of domestic data results. The appreciation can be linked to corrective trading as investors feared the recent heavy Sterling slide was overdone.
The British Pound softened against its major peers on Friday despite positive domestic data which showed New Car Registrations advanced by 8.4% in February. This is due to damp sentiment following yesterday’s disappointing Services PMI. The services sector saw much slower-than-forecast output. Given that the services sector accounts for the largest portion of gross domestic product, the latest figure has caused speculation of weak economic growth in the first-quarter.
EU referendum uncertainty continues to hinder investor confidence, with the UK Pound expected to decline heavily in the build up to the June 23rd referendum vote.
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate is currently trending in the region of 1.8996.
Canadian Dollar to Pound Sterling (CAD/GBP) Exchange Rate Forecast to Hold Steady ahead of Ivey PMI
With crude volatility cooling, as prices hold close to opening levels, the Canadian Dollar softened versus a number of its major peers. This is also partly in response to profit-taking after the Canadian Dollar registered massive gains during February.
US economic data is likely to impact the ‘Loonie’ (CAD). This is due to the fact that positive results from US labour market data will pressure the Federal Reserve into hiking the overnight cash rate. This would make cross-border trade less lucrative for Canada. Additionally, wider monetary policy divergence will see damp investor confidence in the Bank of Canada (BOC).
Later this afternoon the Canadian Dollar may also see volatility in response to domestic manufacturing data. The Ivey Purchasing Managers Index is predicted to decline from 66 to 58 in February.
The US weekly Baker Hughes Rig Count data will also impact the ‘Loonie’ (CAD) as a higher-than-expected result will likely provoke oil price depreciation.
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate dropped to a low of 1.8964 during Friday’s European session.
Pound Sterling to Canadian Dollar (GBP/CAD) Exchange Rate Forecast: Oil Prices to Dictate Movement
Although there will be several data publications with the potential to cause Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate movement, oil prices will likely dominate trader focus. If the Baker Hughes Rig Count exceeds expectations the Canadian Dollar will be very likely to decline significantly.
With that said, however, if US labour market data disappoints the ‘Loonie’ is likely to advance significantly amid hopes of long-term delays to a Federal Reserve benchmark interest rate hike.
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate reached a high of 1.9034 during Friday’s European session.
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