Pound Canadian Dollar Exchange Rate Forecast: Near Term Top Predicted For GBP CAD Rate

April 16, 2014 - Written by David Woodsmith

STORY LINK Pound Canadian Dollar Exchange Rate Forecast: Near Term Top Predicted For GBP CAD Rate

Pound Canadian Dollar Exchange Rate Forecast - Near Term Top Predicted For GBP CAD: Investor sentiment ebbed late yesterday following comments made by Federal Reserve Chair Janet Yellen which had a distinctly risk averse flavour to them. The new head honcho at America’s central bank set off a bout of market jitters when she delivered a set piece speech in Stone Mountain, Georgia, which contained calls for major global retail banks to be forced to maintain a higher capital ratio. Any such move would effectively signal a Quantitative Tightening which would limit the supply of credit from banks to private individuals, limiting the lifeblood which the world economy depends upon.

The Pound Sterling to Canadian Dollar exchange rate is trading up +0.43% at 1.84528 GBP/CAD. The Canadian Dollar to Pound Sterling exchange rate is trading down -0.43% at 0.54192 CAD/GBP.

Although Yellen maintained that such a move would ‘on net, provide economic benefits’, institutional investors, (many of whom were the banks which the Fed Chairwoman was speaking of), were far from convinced. Equities markets had been performing well until Yellen weighed in, with the FTSE 100 and mainland Europe’s bourses both trading in the green during the morning session.

However, the comments from the head of the Fed elicited a pronounced turnaround in appetite for risk which saw US indices tumble, while the FTSE 100 and Frankfurt’s Dax traded heavily into the red. The statement also had a pronounced effect on the relative value of the Commodity Dollars with the Pound Australian Dollar exchange rate climbing back up to as high as 1.7916 GBP/AUD, while the Pound New Zealand Dollar exchange rate gained 0.58% on the day, trading up to 1.9400.

Yesterday afternoon’s forward move for the Pound Canadian Dollar exchange rate was limited by a stronger than expected Canadian Existing Home Sales data for March which pointed to a month-on-month increase of 1.0%. Encouraging signals from the Canadian property market fed into investors’ expectations regarding the next interest rate move from the Bank of Canada, which has adopted more neutral rhetoric during recent months. Many analysts are now predicting that the GBP CAD has reached a near-term top.

For more exchange rate news relating to the Canadian Dollar or to compare exchange rates on an international money, please refer to the main Currency News UK website.

International Money Transfer? Ask our resident FX expert a money transfer question or try John's new, free, no-obligation personal service! ,where he helps every step of the way, ensuring you get the best exchange rates on your currency requirements.

TAGS: Australian Dollar Forecasts Canadian Dollar Forecasts Daily Currency Forecasts