North American Data Hits Pound Sterling USD and CAD Forecast

June 17, 2016 - Written by John Cameron

STORY LINK North American Data Hits Pound Sterling USD and CAD Forecast

GBP/USD Exchange Rate Recovered after Mixed US Data

North American data releases have stolen the limelight in the global currency markets this afternoon, with three key sets being published in the USA and Canada during the past few hours.

The latest set of American housing figures proved to be a curate’s egg; the May Housing Starts number printed at a less bad than expected -0.3%, while the US Building Permits figure showed at a monthly increase of 0.7% when an uplift of 1.3% was anticipated. Investors responded to the dual data releases by selling off their US Dollar (currency : USD) holdings.

The upshot saw the Pound US Dollar exchange rate, which had plunged down to the 1.4000 GBP USD threshold yesterday, recover to tip the scales at above the 1.4300 level.

Canadian Dollar Ceded Ground Following Weak Inflation Data

Meanwhile, on the other side of the border, official government figures showed a sizeable decline in the pace of domestic price rises in Canada. April’s Consumer Price Index inflation figures had come in at a year-on-year 1.7% and analysts had been anticipating a showing of 1.6% for last month’s edition.

When the Canadian CPI result came in at 1.5%, the Canadian Dollar (currency : CAD) gave up ground across the board, with the Sterling Loonie exchange rate tracking Northwards to an intraday high of 1.8495 GBP CAD.

The losses for the Canadian unit would have been of as greater magnitude on the day were it not for a rebound in the price of a barrel of Crude Oil. Brent Crude had started the European session only marginally above the $47.00 a barrel level, but by the time the closing bell approached in the euroland’s bourses, it had recovered to close to $49.00.

Consecutive closes back above the $50 threshold would strongly improve the forecast for the Canadian Dollar. Alternatively, if the near-term downward retracement for the oil price re-establishes itself, then the pressure could increase on the Loonie.

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TAGS: American Dollar Forecasts Canadian Dollar Forecasts Pound Sterling Forecasts