The Pound to Canadian Dollar (GBP/CAD) exchange rate rallied from earlier weakness on Tuesday afternoon after the latest Canadian retail sales data showed an unexpected drop.
According to the report released by Statistics Canada, retail sales in the North American nation fell for the first time in seven months in July.
The data showed that sales eased by 0.1% to $42.5 billion, a figure which was worse than the 0.5% increase widely expected by economists.
The cause for the decline was blamed on a drop in receipts at general-merchandise stores, which include department stores and discount retailers.
Receipts fell by 2.7% to $5.3 billion and the sales of clothes and accessories fell by 2.3%.
Sales were down in five of the 11 sectors, representing 55% of retail trade.
There was some positives from the data however as it showed that the sales of motor vehicles continued to do well as it advanced for a third time in four months to rise by 1.6%.
Sales volume was flat, the weakest showing since December. This figure, which feeds into estimates of output growth, suggests retail sales may not have contributed to July’s gross domestic product.
On a year on year basis retail sales slipped from 5.9% to 5% from the previous year.
Following the release of the data the Pound to Canadian Dollar exchange rate edged higher to 1.808
Against the US Dollar, the ‘Loonie’ pulled back from a session high.
Earlier in the session, the ‘Greenback’ came under pressure as investors embarked on a round of profit taking following the US currency’s recent rally.
The Pound meanwhile was continuing to find support from last Friday’s No to independence victory in the Scottish Referendum.
Pound to Canadian Dollar Exchange Rate Forecast
Further sharp gains for the Pound are unlikely for the rest of the week due to a lack of domestic data releases for both currencies.
Tuesday’s gains for Sterling were restrained after a report showed that UK public sector borrowing increased by £700 million compared to the previous year.
A separate report also showed that mortgage approvals eased last month.
The only day, which is likely to offer support to the Pound, will be Thursday when Bank of England Governor Mark Carney delivers a speech in Wales.
Investors will watching closely for any signs that the BoE is considering raising interest rates or altering monetary policy.
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,0.5533 ,
Canadian Dollar,,US Dollar,0.9075 ,
Canadian Dollar,,Euro,0.7035 ,
Canadian Dollar,,Australian Dollar,1.0226,
Canadian Dollar,,New Zealand Dollar,1.1185 ,
US Dollar,,Canadian Dollar,1.1026 ,
Pound Sterling,,Canadian Dollar,1.8096 ,
Euro,,Canadian Dollar,1.4206 ,
Australian Dollar,,Canadian Dollar,0.9796 ,
New Zealand Dollar,,Canadian Dollar,0.8929 ,
[/table]
