Midweek Forecast Data Highlights for British Pound Sterling: GBP to CAD to Hit Best Rate?

September 9, 2015 - Written by John Cameron

STORY LINK Midweek Forecast Data Highlights for British Pound Sterling: GBP to CAD to Hit Best Rate?

UK Manufacturing Production Could Send Pound Sterling Exchange Rate Higher

This morning’s session brings the publication of a raft of UK data releases which analysts forecast will alter the relative value of the Pound Sterling (currency : GBP) moving forward. The set-up for the Pound is delicate, with economists predicting that the July year-on-year UK Industrial Production data will show a slight dip from June’s counterpart showing of 1.5%. British Manufacturing Production figures, published at the same time, are expected to show at exactly the same as June’s print of 0.5%. If either of these closely-monitored data releases misses expectations either to the upside or the downside, then expect Sterling’s value to alter against the other sixteen most actively traded global tenders.

British Pound (GBP) Gains on EUR, USD, CAD as FTSE 100 Gains

The Pound enjoyed a strong start to yesterday’s session against the other major units, with the Pound Sterling Canadian Dollar exchange rate improving to 2.0435 GBP CAD during early trade. The Pound re-enforced its recent reputation for moving in step with major stock markets during the hours directly following the European opening bell. London’s FTSE 100 jumped by almost 2.0% during early trade, while the euroland’s bourses enjoyed similar gains. The improvement in investor sentiment favoured Sterling against the other major global units thanks to market participants’ expectations that the Bank of England (BoE) will be one of the first major central banks, after the US Federal Reserve, to increase its key interest rate. The ‘risk-on’ trading environment during the morning therefore benefitted the Pound more than almost all of the other leading world currencies.

GBP-CAD Could Hit Best Conversion Rate After BOC Announcement Today

However, the ebullient mood amongst investors wore off as the day progressed and support for Sterling drifted as a consequence, with the Pound Sterling Canadian Dollar exchange rate sliding to as low as 2.0265 GBP CAD as a result. The Pound Loonie exchange rate will receive further direction this afternoon when the Bank of Canada (BOC) makes its latest interest rate announcement. Analysts forecast that the BOC’s monetary policy team will opt to maintain its key lending rate at its current level of 0.50%. Given the recent economic turmoil in China, such an outcome would be likely to prompt a mini-relief rally for the Loonie, potentially sending GBP CAD back down through the two to one threshold.

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