Pound Canadian Dollar (GBP/CAD) Exchange Rate Falls as Investors Await BoC Interest Rate Decision
The Pound Canadian Dollar (GBP/CAD) exchange rate is falling this morning, as investors anticipate the Bank of Canada’s (BoC) interest rate decision.
At the time of writing, GBP/CAD is trading at around CA$1.6452, a fall of roughly 0.2% from the morning’s opening rates.
Canadian Dollar (CAD) to be Boosted by BoC Rate Hike?
The Canadian Dollar (CAD) may strengthen later today, as the Bank of Canada (BoC) is due to publish their latest interest rate decision.
Currently, markets have priced in a 17bps interest rate hike, while analysts are anticipating a 25bps hike. However, the key driver could be the accompanying monetary policy report. The BoC originally began as a more hawkish bank, but recently policymakers have signalled that a pause may be on the cards.
If the central bank surprises with a pause during this afternoon’s decision, CAD exchange rates may weaken. However, if the BoC leaves room for further rate hikes and delivers a 25bps hike, the ‘Loonie’ may gain ground.
Further ahead, thin trade is expected for tomorrow. As such, the oil-linked Canadian Dollar may continue to trade on oil price fluctuations. With oil prices currently in flux, further instability may keep the ‘Loonie’s gains capped.
Pound (GBP) to be Weighed Down by Thin Trade?
The Pound (GBP) may fluctuate over the course of today, as thin liquidity keeps Sterling vulnerable to domestic news.
Industrial action is continuing across the UK with fresh walkouts being staged at the Amazon warehouse in Coventry. This is the first strike action of its kind in the UK, and could potentially inspire further action.
Similarly, political controversy may weigh on GBP exchange rates, as the Chairman of the Conservative Party Nadhim Zahawi continues to be embroiled in a scandal over his tax affairs. Should he resign, it may dent the Pound.
Tomorrow, the Confederation of British Industry’s (CBI) distributive trades survey for January is due to release. As this examines retail sales and canvasses the sector’s outlook, the forecast of a fall from 11 to -5 may weigh on Sterling. As it will combine with the previous data release that showed a fall in retail sales in December, it could provide bleak reading for the UK’s economy.
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