Pound Sterling to Canadian Dollar (GBP/CAD) Exchange Rate Forecast to Edge Lower despite Low Crude Prices

March 30, 2015 - Written by Toni Johnson

STORY LINK Pound Sterling to Canadian Dollar (GBP/CAD) Exchange Rate Forecast to Edge Lower despite Low Crude Prices

Although investor sentiment towards the Pound saw an increase in positivity after Bank of England (BoE) Governor Mark Carney dismissed Chief Economist Haldane’s dovish comments about rate revisions, the British asset softened versus most of its major peers. This is as a result of mixed domestic data results and ongoing political uncertainties as we draw nearer to the general election. The Canadian Dollar, meanwhile, strengthened versus many of its most traded currency rivals despite crude prices showing resilience to the downside. The ‘Loonie’ appreciation can be attributed to positive domestic data and tracking the US Dollar bull. The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate is currently trending in the region of 1.8708.

With opinion polls showing no clear majority for either of the two big-hitters in the forthcoming general election, political uncertainties are weighing heavily on demand for the British asset. However, after BoE Governor Mark Carney dismissed comments that the central bank may have to cut rates, the Pound advanced versus many of its rivals. Data on Monday produced mixed results which had minimal impact on Sterling movement. Of particular positivity, however, was Mortgage Approvals which came in at 61,800 in February; eclipsing the median market forecast of 61,500 approvals. Slightly less impressive was Net Consumer Credit which came in at 0.7 billion in February; failing to meet with the market consensus of 0.9 billion. The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate dropped to a low of 1.8685 today.

As it tracks the bullish run of its North American neighbour, the Canadian Dollar strengthened versus many of its most traded currency rivals. This is despite crude oil prices remaining below $50 a barrel which usually has an adverse affect on the commodity-correlated currency. Canadian data also produced positive results which spurred the ‘Loonie’ advance. On the month, Industrial Product Price increased by 1.8% in February which eclipsed the median market forecast figure of 0.9%. February’s Raw Material Price Index advanced by 6.1% on the month, bettering the market estimate of 4.5% growth. Given the lack of domestic data to provoke changes, the Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate is likely to hold losses for the remainder of the European session. There is the potential for heightened volatility on Tuesday with several ecostats pertaining to both nations due for publication. The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate has reached a high of 1.8769 today.

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