British Pound to Canadian Dollar Exchange Rate Forecast - GBP CAD to Fluctuate

August 11, 2014 - Written by Toni Johnson

STORY LINK British Pound to Canadian Dollar Exchange Rate Forecast - GBP CAD to Fluctuate

The British Pound to Canadian Dollar exchange rate (GBP/CAD) was slightly softer on Monday but was likely to see mixed movement for the rest of the session as oil prices continued to fluctuate and as investors remained wary over events in Iraq and Ukraine.

Crude oil, which is Canada’s biggest exported commodity, was seeing swings from losses to small gains as traders awaited new developments from the conflict zones in Ukraine and Iraq. According to the New York Mercantile Exchange crude oil for delivery in September increased by 9 cents to trade in the region of $97 per barrel.

The key CAD forex rates are as follows:

- The Canadian Dollar to Australian Dollar exchange rate is trading up +0.58% at 0.98805 CAD/AUD.
- The Canadian Dollar to Euro exchange rate is trading up +0.58% at 0.68389 CAD/EUR.
- The Canadian Dollar to Pound Sterling exchange rate is trading up +0.37% at 0.54526 CAD/GBP.
- The Canadian Dollar to New Zealand Dollar exchange rate is trading up +0.48% at 1.08205 CAD/NZD.
- The Canadian Dollar to US Dollar exchange rate is trading up +0.43% at 0.91537 CAD/USD.

The Canadian currency did receive some support, with the Pound to Canadian Dollar exchange rate edging lower, as risk aversion in the markets eased slightly after the US air force launched airstrikes against Jihadist militants from the Islamic State. The threat to global oil supplies was to have eased as a result. The intervention of the US caused some investors to consider the Iraqi conflict as now contained. The GBP CAD sits at 1.83458.

‘There is probably no doubt on the ground that the strikes have helped improved confidence on the Kurdish side. Given the US commitment to bomb, if the Islamic State stick their next out too far I would say the situation there is contained,’ said Ole Sloth Hansen, an analyst at Saxo Bank.

The US airstrikes targeted a number of IS positions and destroyed a number of armed trucks and artillery positions. Risk aversion could return regarding the Iraqi situation however after the US removed its support for embattle Iraqi Prime Minister Nouri al-Maliki. The move has created a political crisis in the under threat country.

Today Iraq’s president asked Deputy Parliament Speaker Haider al-Abadi to form a new government. Concerns are now growing as to how Mr al-Maliki will react.
The Canadian Dollar also found support from the release of domestic data by the Canada Mortgage and Housing Corp, which showed that the number of Canadian housing starts increased by a seasonally adjusted level of 200,098 in July. The figure was better than economist expectations for a reading of 193,000
.
The Pound meanwhile is also experiencing muted trading due to a lack of any market moving data releases. It did however achieve some upward movement against the US Dollar and Euro as investors turned their focus onto Wednesdays key economic data releases.

Economists will be looking at the upcoming inflation rate and unemployment data for clues as to when the Central Bank could choose to raise interest rates. The focus however is likely to be concentrated on the latest wage growth report.

A rise in wages was highlighted as one of the main factors needed before a rate rise would be considered. After last month’s disappointing figures the market will be expecting signs of improvement. If the data comes in below expectations then we can expect to see the Pound go back onto the retreat.

A report released by the Chartered Institute of Personnel and Development (CIPD) showed that private sector median wage settlements in the year to June 2015 are expected to be 2%. They were 2.5% in 2013.

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