GBP CAD Exchange Rate Forecast To Fall On Canadian Inflation Data, GBP EUR Rate Steady

Published: Friday, 19 April 2013 11:00 BST - Written by David Woodsmith

STORY LINK GBP CAD Exchange Rate Forecast To Fall On Canadian Inflation Data, GBP EUR Rate Steady

The overnight session brought a brace of negative commentaries from global policymakers which could hold back the Pound in the short-to-medium term. Christine Lagarde, the Managing Director of the International Monetary Fund (IMF), described the recent economic figures from the UK economy as ‘not particularly good’.

Lagarde’s comments were backed up by those of the next Governor of the Bank of England, Mark Carney, who also spoke last night. The current Bank of Canada Governor reminded an interviewer that central banks could only create the ‘conditions for growth’, but were unable to actually ‘deliver long term growth’. Carney also stated that recent data releases from the USA suggested that the world’s leading economy was leaving other global ‘crisis economies’ behind. Investors inferred from this that Carney does not consider the flailing British economy to be in a good position.

Looking ahead to today’s session, the key tier one data release comes this afternoon in Canada, when the latest domestic CPI inflation data is released/ Following Mark Carney’s suggestion earlier this week that the next move for Canadian interest rates would be to the upside, analysts will be closely watching today’s release. It is likely that Carney was speaking having already had an advance viewing of today’s inflation data. If this proves to be the case, and today’s Canadian price rise data does print at above analysts’ expectations of an annualised showing of a 1.1%, then market participants’ bets regarding a hike in Canadian interest rates will sharply increase, strengthening the Canadian Dollar. Such an outcome would be likely to send the Pound Canadian Dollar exchange rate (currency : GBP/CAD) down towards the psychologically key 1.5500 level from its present rate of 1.5721.

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TAGS: Canadian Dollar Forecasts Daily Currency Updates Pound Can Forecasts