British Pound to Canadian Dollar (GBP/CAD) Exchange Rate Bullish as Oil Drops

December 8, 2014 - Written by James Fuller

STORY LINK British Pound to Canadian Dollar (GBP/CAD) Exchange Rate Bullish as Oil Drops

Our British Pound Sterling (currency:GBP) to Canadian Dollar (currency:CAD) Exchange Rate News and Forecast

The Pound advanced against North American counterpart the Canadian Dollar after crude oil prices hit a five-year low.

Oil prices have been a sensitive subject over the past few months as a global surplus (accredited to an increase in shale oil supplied forced commodity values lower.

The ‘Loonie’ as the Canadian Dollar is known as is closely linked to the price of oil as Canada’s largest export.

CAD Rates Today (10/12/2014 14:00 GMT)

The Pound to Canadian Dollar exchange rate is +0.25 pct higher with a conversion rate of 1 GBP equals 1.79911 CAD.
The Euro to Canadian Dollar exchange rate is +0.22 pct higher with a conversion rate of 1 EUR equals 1.42054 CAD.
The US Dollar to Canadian Dollar exchange rate is +0.21 pct higher with a conversion rate of 1 USD equals 1.14655 CAD.
The Swiss Franc to Canadian Dollar exchange rate today is converting +0.22 per cent higher at 1.18148 CHF/CAD.
The Hong Kong Dollar to Canadian Dollar exchange rate converts +0.23 per cent higher at 1 HKD is 0.14791 CAD.
The Australian Dollar to Canadian Dollar exchange rate converts +0.6 per cent higher at 1 AUD is 0.95511 CAD.

Therefore, forecasts for further tumbles in the oil has offered little support for the Canadian Dollar. Last week saw the Canadian Unemployment Rate climb from 6.5% to 6.6.% as the Net Change in Employment figure sank by -10.7K.

With the Canadian economy losing jobs—especially amid the backdrop of massive job creation in the US—the ‘Loonie’ softened accordingly. Economist Nick Exarhos commented: ‘All in all, despite the relatively modest drop in employment for November, (the) labour market still appears to be on better footing heading into the end of the year.’

Canadian Dollar Exchange Rate Outlook

Monday saw Canadian Housing Starts figures increase by 195.6K in November, a slight improvement on economists forecasts of 195.0K.

Moreover, the figure bested October’s 183.7K. However, Building Permits sank in October at only 0.7%. Forecasts were for 3.9% growth after October’s strong 12.5%.

Economist Diana Petramala stated: ‘While interest rates are expected to remain low in 2015, the housing market will face a number of headwinds.’

Most advances in the Canadian housing market during 2014 can be attributed to lower interest rates and a steadily decreasing unemployment.

However, unreassuringly, the Bank of Canada (BOC) suggested that there are signs of ‘imbalances’ in the housing market.

Despite the central bank believing the economy will moderate and a housing price crash won’t occur, some economists’ are concerned for the future of the housing market.

Pound Sterling Exchange Rate Finds Support

Meanwhile, the Lloyds UK Employment Confidence Index rose in November from 0 to 1. Any increase in confidence in the UK can offer the Pound some support.

Additionally, the Bank of England (BoE) announced that the UK economy could withstand increases in borrowing costs, if household income rises accordingly.

Furthermore, the central bank is preparing to test eight major UK banks in an attempt to distinguish whether or not they could withstand a fresh financial crisis.

The results out later in December will test banks in a climate of 4.0% interest rates.

Hawkish BoE official Martin Weale is expected to speak in Monday’s session which could help the Pound climb higher against a basket of other major currencies if favourable statements are made.

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