GBP CAD Rate Edges Higher On BoC Comments, GBP USD Dips On Firm US Data

Modified: Wednesday, 6 March 2013 16:18 BST - Written by Ben Hughes

STORY LINK GBP CAD Rate Edges Higher On BoC Comments, GBP USD Dips On Firm US Data

Yesterday afternoon’s session brought yet another encouraging data release from the world’s primary economic power. Analysts had expected February’s US ADP Employment data, published at the start of the North American session, to show an increase of 170,000 in the number of American’s in employment last month. The actual print tipped the scales at 198,000, triggering renewed optimism that tomorrow’s key Non-Farm Payroll figure may also show at better than anticipated levels.

The fact that US enterprises are feeling confident enough to hire in these sorts of numbers suggests that the US economy is in relatively rude health. Yesterday afternoon’s ADP Employment data also revealed an upward revision to the January figure, from 192,000 to a far more positive 215,000. The fact that over 400,000 jobs have been generated in the US in the first two months of the year hints that the vast American economy has at last turned a corner following the beating it took post-2007.

Yesterday’s US Factory Order data for January provided further reason for optimism. Although it printed at -2.0%, this was better than the -2.2% showing which analysts had been anticipating. The slew of encouraging American data, which built on Tuesday’s ISM Non-Manufacturing survey which showed that America’s service sector had expanded for the 38th month in succession, helped the US Dollar firm in the latter part of yesterday. This sent the Pound US Dollar exchange rate down into the lower part of the 1.5000-1.5100 range before close of business.

Elsewhere in North America, yesterday’s Bank of Canada policy decision saw the Canadian central bank maintain its key lending rate at its current level of 1.00%, as per expectations. However, the ‘Loonie’ lost ground following the announcement thanks to the BoC’s accompanying statement which was of a dovish tone, stating that monetary policy in Canada would remain loose for an unspecified time. The Pound Canadian Dollar exchange rate (currency : GBP CAD) was lodged in the lower part of the 1.5500s at yesterday’s European equities close.

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