The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate was 0.25% softer on Thursday thanks to uninspiring economic developments in the UK.
The commodity-driven Canadian Dollar was also bolstered by encouraging economic reports from China and the Eurozone.
China’s manufacturing PMI for July came in well above forecast levels, indicating that the nation’s economic recovery is continuing with the support of government stimulus measures.
The result pushed commodities like copper higher and aided the performance of higher-risk currencies like the Canadian Dollar.
Meanwhile, over in the Eurozone measures of manufacturing and services for the currency bloc and its largest economies surprised to the upside.
In a statement published with the figures Markit economist Chris Williamson observed; ‘Even with political concerns weighing on business sentiment, it’s encouraging to see business in the ‘periphery’ expanding at the fastest rate since 2007. Germany also continues to see strong growth as its increasingly buoyant service sector helps to offset some of the slowing seen in manufacturing.’
France was a sore point, but Germany’s impressive results indicate that the Eurozone’s superpower could be rebounding from its recent slowdown.
The UK’s unexpectedly poor retail sales gain in June also contributed to the declines in the Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate.
This week’s main UK reports have been a bit of a letdown and have pushed the Pound to multi-week lows against several of its most traded currency counterparts.
The US Dollar to Canadian Dollar (USD/CAD) exchange rate advanced to a high of 1.0747 on Thursday thanks to upbeat US employment figures and an impressive performance in the nation’s manufacturing sector.
If tomorrow’s UK Gross Domestic Product figures also disappoint it’s possible that the Pound could flounder further as the week draws to a close.
Quarterly growth of 0.8% has been predicted.
Next week the main economic reports for Canada to be aware of include the nation’s Industrial Product Price Figures, Raw Materials Price Index, Average Weekly Earnings figures, Gross Domestic Product Report and RBC Canadian Manufacturing PMI.
If the reports give the Bank of Canada reason to become more hawkish in its interest rate stance the Canadian Dollar may climb.
Of course, fluctuations in the Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate could also occur as a result of the UK’s news, although the various British housing reports will probably be of most interest to investors.
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