GBP/CAD Exchange Rate Edges Higher as BoC Inflation Data Falls below Forecasts
The Pound Canadian Dollar (GBP/CAD) exchange rate rose by 0.3% today, leaving the pairing fluctuating around $1.6291 on the interbank market.
The Canadian Dollar (CAD) fell against the Pound (GBP) today following yesterday’s printing of the Bank of Canada’s (BoC) core year-on-year inflation data for June.
These fell below forecasts from 2.1% to 2%, while monthly figures came in flat at 0%.
James Marple at TD Bank, commented:
‘With energy prices pulling back, inflation is right back on the two per cent target. [And] [w]ith trade tensions elevated and global central banks easing policy in response, the Bank of Canada is likely to remain on the sidelines and especially attentive to signs that global weakness is seeping into Canada.’
As a result, ‘Loonie’ traders are becoming increasingly jittery as fears of a BoC rate cut rise.
Canadian investors will be awaiting the printing of the Canadian ADP employment change figures for June, which are due later this afternoon.
The Pound, meanwhile, has improved following yesterday’s UK inflation data, which confirmed estimates and remained at 2% for its second month in a row.
GBP/CAD Exchange Rate Rises as Positive UK Data Boosts Sterling despite Brexit Woes
Sterling rose following today’s publication of the UK retail sales for June.
Month-on-month figures beat forecasts, rising from -0.6% to 1%, while year-on-year figures increased 3.8%.
David Cheetham, an Analyst for the online broker XTB, commented:
‘The resilience of the consumer in the face of ongoing political uncertainty is both surprising and admirable, suggesting that despite heightened levels of uncertainty people are keeping calm and carrying on.’
Following on from yesterday’s stable inflation figures, this week’s earlier rise in wages and the lowest employment figures since 1975, many Pound traders have good reasons to be optimistic about the UK’s economy despite ongoing Brexit woes.
Brexit concerns, however, have prevented some of the Pound’s gains following the hardening stances on the UK’s relationship with the EU coming from both Tory leadership hopefuls, Boris Johnson and Foreign Secretary Jeremy Hunt.
GBP/CAD Outlook: UK Public Spending and Canadian Retail Sales in Focus
Canadian Dollar (CAD) investors will be looking ahead to tomorrow’s release of the Canadian retail sales figures for May.
As these are expected to rise from 0.1% to 0.3%, we could see the CAD/GBP exchange rate claw back some of its losses today.
Sterling traders, meanwhile, will be looking ahead to tomorrow’s printing of the Public Sector Net Borrowing figures for June.
These are expected to decrease.
Brexit discussions will remain in focus, with a vote due to take place today which will determine whether the next Prime Minister could suspend Parliament in order to push through a no-deal.
If this fails to gain the necessary amount of backing, we could see GBP/CAD begin to fall as Brexit fears would once again rise.