The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate advanced by around 0.7% on Thursday afternoon.
Despite the fact that crude oil prices extended the uptrend as the European session progressed, the Canadian Dollar declined versus the Pound. This is likely due to traders taking profits from the earlier ‘Loonie’ (CAD) gains.
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate is currently trending in the region of 2.0217.
GBP/CAD Conversion Rate Predicted to Hold Steady after British GDP Met with Estimates
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate was trending within a limited range on Thursday afternoon.
After British fourth-quarter growth figures met with expectations the Pound advanced versus most of its major peers. On an annual basis, fourth-quarter Gross Domestic Product equalled the median market forecast 1.9% growth. On the quarter, GDP advanced by 0.5% in line with the market consensus. Whilst this marks the 12 consecutive quarter of growth the headline figure masks lopsided sectoral growth. British GDP was only able to register growth thanks to positive services output of 0.7% whilst construction and industrial production both failed to register gains.
‘Carney’s conditions for raising interest rates — which include growth looking strong enough to eliminate the remaining slack in the economy — are probably still not met,’ said Vicky Redwood, an economist at Capital Economics in London. ‘The recovery still looks very unbalanced.’
Naturally Chancellor George Osborne put a politician’s positive spin on the data, but this has not pulled the wool over the eyes of investors. ‘Despite turbulence in the global economy, Britain is pushing ahead,’ he said in a statement. ‘With the risks we see elsewhere in the world, there may be bumpy times ahead.’
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate is currently trending in the region of 2.0071.
CAD/GBP Conversion Rate Predicted to Trend Statically as the US Dollar Softens
Although rising crude oil prices supports demand for the British Pound amid hopes that a sustained rally will lift inflation, the Canadian Dollar enjoyed a greater boost from rising crude given it’s an exporter of ‘Black Gold’. Oil prices rose after Russia announced intentions to work with OPEC in order to lift global prices. Even a massive US inventories report, which saw stockpiles reach the highest level since the 1930’s, wasn’t enough to cause oil prices to fall.
Nikolai Tokarev, the head of Russian oil pipeline monopoly Transneft, said ‘an oil executives and government officials meeting in Moscow on Tuesday had reached the conclusion that talks with OPEC were needed to shore up the oil price.’
Also supporting demand for the Canadian Dollar is a softer US Dollar amid hopes that a sustained depreciation will allow for more profitable cross-border trade.
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate dropped to a low of 2.0030 during Thursday’s European session.
Pound Sterling to Canadian Dollar (GBP/CAD) Exchange Rate Forecast: UK Consumer Confidence to Provoke Volatility
With the US Dollar softening and crude oil prices continuing to climb, there is a very real chance that the Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate will soften as the European session progresses. However, the GBP/CAD exchange rate is likely to see more volatility in response to Friday’s British Consumer Confidence report. Friday’s Canadian GDP and PPI data will also cause GBP/CAD changes tomorrow.
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate reached a high of 2.0184 during Thursday’s European session.