The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate began recording losses early in Tuesday’s European session ahead of Markit’s UK Composite and Services Purchasing Managers Indexes (PMI).
After a disappointing day for data on Monday, the Pound Sterling exchange rate softened dramatically.
Currency strategist Neil Mellor commented: ‘The data has been deteriorating steadily. The market has been able to focus on the political risks relating to the election as well.’
Earlier… The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate continued to fall as Monday’s European session came to a close, as fears that a slowdown in the UK economic recovery continue to circulate.
Economists had predicted a soft fall from 59.4 to 59.0; however, the actual figure came in at only 57.6.
The Markit report read: ‘Robust overall output growth continued across the UK construction sector in December, but the strength of recovery moderated further from the peaks seen earlier in the year. At 57.6, down from 59.4 in November, the seasonally adjusted Markit/CIPS UK Construction Purchasing Managers Index (PMI) signalled the least marked increase in construction output for 17 months.’
Meanwhile, the Canadian Dollar has been trending lower against other currency majors as the price of oil continues to fall. Crude has dropped to its lowest level since 2009 as additional oil supplied from countries such as Iraq and Russia have added to the global surplus.
Commodity strategist Ole Hansen stated: ‘Rising supply, slowing refinery demand, rising [US] Dollar, it is the same factors driving prices. With news from Iraq and Russia about increased supply, then the expectations about the glut just continue to grow.’
Pound Sterling to Canadian Dollar (GBP/CAD) Exchange Rate Forecast
The Canadian Dollar exchange rate could experience significant fluctuations this week with the release of highly influential domestic Net Change in Employment figures, due out on Friday.
December’s figure is forecast to show that the Canadian economy added 10.0K positions in December after November’s -10.7K decline.
Friday saw the release of RBC’s Canadian Manufacturing PMI which fell from 55.3 to 53.9.
RBC chief economist Paul Ferley stated: ‘Despite the recent fluctuation in commodity prices, particularly for oil, we continue to be constructive on the overall economic environment in Canada, including exports, which should mean good things for manufacturing going forward.’
Meanwhile, the Bank of England (BoE) is scheduled to announce its latest interest rate decision on Thursday. The central bank is expected to leave the benchmark rate at 0.50%.
In addition, the central bank will be publishing previously unknown details of its protocol during the 2008 financial crisis. The Bank of England has recently stated it will be taking steps to allow transparency into its more intricate workings.
Markit’s UK Composite and Services PMI’s are out on Tuesday, alongside Canadian Industrial Product Price and Raw Materials Price Index.
Canada’s Ivey Purchasing Managers Index is forecast to fall from 56.9 to 52.0 on Wednesday, which could see the Canadian Dollar to Pound Sterling (CAD/GBP) exchange rate soften.
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate is residing in the region of 1.7932 with a -0.73% market movement. The Canadian Dollar to Pound Sterling (CAD/GBP) exchange rate is trending at 0.5583.