Home » CAD » CAD to GBP » Pound Sterling to Canadian Dollar (GBP/CAD) Exchange Rate Forecast: ‘Loonie’ Volatile as Oil Turbulence Resumes

Pound Sterling to Canadian Dollar (GBP/CAD) Exchange Rate Forecast: ‘Loonie’ Volatile as Oil Turbulence Resumes

Canadian Dollar Currency Forecast

Pound Sterling (GBP) Trends Lower as UK Trade Deficit set to Widen

Ahead of the UK’s latest Visible Trade Balance figure the Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate has been trending lower around 1.8938 on Friday morning.

Earlier…

An improved RICS House Price Index has shored up Pound Sterling (GBP) today, while the Canadian Dollar (CAD) weakens in response to the latest fall in oil prices.

Pound Sterling to Canadian Dollar (GBP/CAD) Exchange Rate Slumped after BOC Held Fire on Interest Rates

Demand for the Canadian Dollar (CAD) rose sharply yesterday afternoon after the Bank of Canada (BOC) opted to hold steady on interest rates for another month. While market expectations were for such a move traders had been inclined to position themselves cautiously ahead of the announcement, bracing for the eventuality that policymakers would opt for surprise monetary loosening. This decision ultimately seems to imply a greater level of confidence in the robustness of the Canadian economy, as well as its ability to weather increasing downside risks, and consequently pushed the Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate lower.

In spite of an improved raft of UK Industrial and Manufacturing Production figures the Pound (GBP) was unable to hold onto any particular gains on Wednesday. This was largely due to the latest NIESR Gross Domestic Product Estimate, which estimated that growth had slowed from 0.4% to 0.3% in the three months to February.

Sliding Oil Prices Dent Canadian Dollar (CAD) Exchange Rate Today

Oil has been on a fairly turbulent trend this week, with rumours of a meeting between members of OPEC and other oil producing nations having seen Brent crude break back above the $40 per barrel mark. However, as US oil inventories have continued to build, the price of crude soon returned to a downtrend, helping to erode the ‘Loonie’ rally. Despite January’s New Housing Price Index rising on the year, this was contrasted by a disappointing slip on the month and poor fourth quarter Capacity Utilisation Rate.

Confidence in the Pound, meanwhile, has grown in response to the latest RICS House Price Balance demonstrating an increase in demand. While there have been worries over the heat of the domestic housing market this stronger showing nevertheless prompted the GBP/CAD exchange rate to trend higher, with investors taking comfort in any signs of robustness within the UK economy.

GBP/CAD Exchange Rate Forecast: Stronger Canadian Employment Data to Prompt ‘Loonie’ Rally

Ahead of the weekend the Canadian Dollar could make fresh gains if February’s Canadian Net Change in Employment proves sufficiently bullish. Expectations are for an increase of 10,000, which would not alter the unemployment rate but would still suggest a more encouraging tightening in the jobs market.

The Pound is also expected to soften somewhat if the latest visible trade deficit widens as forecast on Friday. This would not seem to bode well for Chancellor George Osborne’s next budget statement and could provoke a fresh wave of ‘Brexit’ worries if the figure proves sufficiently disappointing.

Current GBP, CAD Exchange Rates

At the time of writing, the Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate was making gains in the region of 1.8916, while the Canadian Dollar to Pound Sterling (CAD/GBP) pairing was slumped around 0.5288.