On Friday the Pound to Canadian Dollar (GBP/CAD) exchange rate posted an impressive increase in response to the news that Canada’s unemployment rate unexpectedly climbed in June as the number of people in work fell by 9,500.
While gains were a little tempered by a less-than-impressive UK Construction Output report, the GBP/CAD pairing was still able to achieve its highest levels for the week.
However, on Monday the Canadian Dollar recovered ground against peers like the Pound and US Dollar.
The commodity-driven asset experienced little movement following the publication of Canada’s Teranet/National Bank HP Index for June, which showed a month-on-month decline of 1.1% and a year on year increase of 4.4%.
This week the main cause of volatility in the commodity-driven currency is likely to be the Bank of Canada’s interest rate decision, taking place on Wednesday.
Given the patchy nature of Canada’s fundamentals over the last few months, the BOC is expected to leave interest rates on hold and fiscal policy unchanged.
Investors will be paying close attention to any commentary accompanying the decision.
In the view of currency strategist Mark Chandler; ‘We will be looking for any comments about the recent strengthening of the Canadian Dollar and the risks that it may pose for their assumption of strengthening exports.’
If BOC Governor Stephen Poloz attempts to talk down the ‘Loonie’ the commodity-driven currency could slide against the majority of its counterparts.
Other Canadian reports to be aware of this week include Canadian Existing Home Sales figures, International Securities Transactions and Canada’s Consumer Price Index.
Of course, movement in the Pound to Canadian Dollar (GBP/CAD) exchange rate could also be caused by UK developments, including the nation’s employment and inflation figures. If the UK data is interest rate-hike supportive, Sterling could achieve fresh highs against peers like the Canadian Dollar in the days ahead.
According to a survey conducted by Bloomberg News, one in three economists is anticipating an interest rate increase before the end of the year.
Economist Brian Hillard was quotes as saying; ‘When you put the markets under starters’ orders you’ll introduce uncertainty if you don’t do anything for six to nine months. What’s striking is how the UK seems to have gone its own way compared to the Eurozone. The recovery has still got legs.’
On Monday the Pound to Canadian Dollar (GBP/CAD) exchange rate achieved a high of 1.8416 and fell to a low of 1.8306.
Canadian Dollar (CAD) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Canadian Dollar,
,Pound Sterling,0.5452,
Canadian Dollar,,US Dollar,0.9320,
Canadian Dollar,,Euro,0.6834,
Canadian Dollar,,Australian Dollar,0.9917,
Canadian Dollar,,New Zealand Dollar,1.0561,
US Dollar,,Canadian Dollar ,1.0732,
Pound Sterling,,Canadian Dollar,1.8331,
Euro,,Canadian Dollar,1.4627,
Australian Dollar,,Canadian Dollar,1.0080,
New Zealand Dollar,,Canadian Dollar,0.9451,
[/table]
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