Canadian Dollar Rate Today: CAD/GBP Exchange Rate Sees Losses but Higher vs Euro, Dollar & Lira Conversion Rates

September 8, 2014 - Written by Frank Davies

STORY LINK Canadian Dollar Rate Today: CAD/GBP Exchange Rate Sees Losses but Higher vs Euro, Dollar & Lira Conversion Rates

The Canadian Dollar to Pound (CAD/GBP) exchange rate made strong gains at the start of the week as concerns over the upcoming Scottish Independence referendum damaged sentiment towards the British currency.

Domestic economic data released BY Statistics Canada showed that Canadian building permits increased unexpectedly in July. Permits climbed to their best level on record as a surge in demand for new apartments and condominiums in the Ontario region jumped to an all time high.

The value of building permits issued by Canadian municipalities advanced for a fourth consecutive month in July, rising by 11.8% to 9.16 billion Canadian dollars ($8.42 billion) from an upwardly revised 16.4% in June, Statistics Canada said Monday. Market expectations were for permits to decline by 7.5% in July from the originally estimated 13.5% increase in the prior month, according to a report from Royal Bank of Canada.

Economists had been widely forecasting for a decline of 4.2%.

Following the release of the data, the Canadian Dollar was able to trim its losses against the US Dollar. The ‘Loonie’ could make further gains as the data increased optimism over the health of the nation’s economy.

The Pound meanwhile tumbled sharply against all of its major peers after a opinion poll published over the weekend showed that Scotland could vote in favour of independence when they go to the polls on September 18.

Economists are forecasting that the currency will decline further over the coming days as the poll highlighted that the vote’s outcome is far from certain. The news also dented speculation that the Bank of England will choose to raise interest rates this year and could cause policy makers to maintain rates low for longer.

‘There seems to be plenty of scope for further Pound declines the pronounced degree of uncertainty and unknowns related to a breakup. A Yes victory is still hardly priced in, as this only has become a focus since the middle of last week when we had the first surprise poll. I see little upside for the Pound now through to the September 18th referendum,’ said an economist from the Bank of Tokyo-Mitsubishi UFJ Ltd.

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