Pound Sterling to Canadian Dollar Today - GBP CAD Exchange Rate Edgses Lower

July 21, 2014 - Written by David Woodsmith

STORY LINK Pound Sterling to Canadian Dollar Today - GBP CAD Exchange Rate Edgses Lower

The Pound to Canadian Dollar exchange pair was holding steady on Monday but both currencies weakened against the US Dollar and other safe haven peers as market sentiment was harmed by growing concerns over the situations in Ukraine, Iraq and Israel. A lack of market moving data also muted market movement. The GBP to CAD exchange rate is today 0.08 per cent lower at 1.83105 GBP/CAD (current rates as of 23/07/2014 09:00 GMT).

The Pound Sterling (GBP) was weakened earlier on Monday as speculation increased that house prices in the UK could fall over the coming weeks. The impact of that however was limited after investors raised their bets that decline in house prices would not be enough to warrant the Bank of England to refrain from being the first major Central Bank to be the first to hike interest rates. The currency did see some profit taking as a result.

“Little has changed in terms of the structural direction and there should be further Pound strength ahead. There is some profit taking on long sterling positions, some of the housing data may be coming in a little bit on the lighter side given the previous performance. But there’s more to come, there’s an underlying bid to the Pound,” said Neil Jones, head of hedge fund sales at London based Mizuho Bank Ltd.

According to Right move house prices declined by 0.8% from the 0.1% increase seen last month.
Also putting pressure upon the Pound was news that UK prosecutors have opened a criminal investigation into alleged manipulation of foreign exchange rates. The Serious Fraud Office is said to ‘probing allegations of fraudulent conduct in the foreign-exchange market”.

The Canadian Dollar was also struggling on Monday as it softened against the Pound and declined against the safe haven US Dollar.
USD/CAD hit 1.0752 during European afternoon trade, the pair's highest since July 18; the pair subsequently consolidated at 1.0748, adding 0.11%.

Demand for riskier commodity based assets such as the ‘Loonie’ fell on concerns that the shooting down of a passenger airliner in Eastern Ukraine will see an escalation in tensions between the West and Russia who are accused of providing anti-aircraft missile batteries to pro-Russian separatist rebels. The Malaysian Airlines plane MH-17 was shot down last Friday resulting in the deaths of all 298 passengers.

Further news out of Ukraine added further pressure upon the forex market as it emerged that Ukrainian government troops launched an assault against the rebel held city of Donetsk.

Risk aversion was not helped by the Israeli ground invasion of the Gaza strip which saw some 100 Palestinians and 18 Israeli soldiers dead in a two-week long bout of violence. The U.S. has accused Russia of complicity in the crash, and European leaders have threatened to impose far reaching new sanctions against Moscow, sparking fears over the impact on global growth.

Further losses for the Canadian Dollar were restrained as oil prices rose in the wake of the concerns. Further violence in the Middle East spooked markets over a possible disruption to global oil supplies after members of ISIS launched an attack on a major Syrian oil field.

As a result of the geopolitical concerns other currencies also fell. The Euro for example fell to a five-month low.

GBP/CAD Update - 22/07/2014

The Pound to Canadian exchange rate is little changed due to a lack of market moving economic data releases. The Cdn Dollar found some support from rising oil prices as concerns over conflicts in Iraq, Syria and Ukraine raised fears over a possible impact to global oil supplies. If US inflation data comes in strongly this afternoon we can expect the CAD to drop.

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