Pound Sterling Canadian Dollar Exchange Rate Trends Tightly after BoE?s Forbes sees No Cause for More Rate Cuts

September 22, 2016 - Written by James Fuller

STORY LINK Pound Sterling Canadian Dollar Exchange Rate Trends Tightly after BoE?s Forbes sees No Cause for More Rate Cuts

Pound Sterling Daily Update: GBP Unsettled after Conflicting BoE Announcements

The Pound (GBP) has been an unpredictable option for investment today, having fluctuated considerably against the Canadian Dollar and most of its other regular peers.

This notable volatility has mainly been caused by the Bank of England (BoE), where last week’s minutes have conflicted directly with comments made by a Monetary Policy Committee (MPC) member.

The minutes strongly indicated that the BoE was geared towards cutting UK interest rates in the future, although a speech from BoE official Kristin Forbes instead stated that no further rate cuts would be necessary.

Pound Sterling Forecast: UK Mortgages due Tomorrow, Major Confidence and GDP Stats Out Next Friday

The Pound is set to have a quiet end to the current week, with only the optimistically-forecast BBA mortgage approvals figure for August being released tomorrow morning.

Looking ahead to the week to come, early GFK consumer confidence data for September is expected on September 30th; forecasts have been for an improvement from -7 to -2.

Closing off the week during the morning next Friday will be the finalised Q2 GDP growth rate figure, which is predicted to rise from 0.4% to 0.6% on the quarter and be revised upwards from 2% to 2.2% on the year.

Canadian Dollar (CAD) News: OECD Cuts CA Growth Forecast, Sales and Inflation Stats due Friday

The Canadian Dollar has fluctuated notably during Thursday’s trading session, having been tight against the Pound and Euro but in high demand when being traded against the New Zealand Dollar and US Dollar.

With no actual domestic data out to refer to, the ‘Loonie’ has instead being unsettled by sudden spikes in the cost of gold and crude oil, which have supported the Canadian currency in some of its pairings.

Less supportively, the recent global economic outlook from the Organisation for Economic Co-operation and Development (OECD) has spelt bad news for the Canadian economy, with OECD growth forecasts for Canada being cut from 1.7% to 1.2% in 2016 and from 2.2% to 2.1% in 2017.

Looking to the future, tomorrow afternoon will bring the Canadian retail sales and inflation rate stats for July and August respectively. Predictions have been positive for the outcomes for both areas.

UK Economic Focus: BoE’s Forbes sees Poor Case for Further UK Interest Rate Cuts

Speaking in London on Thursday, BoE official and MPC member Kristin Forbes threw a spanner in the works for previous BoE minutes.

This was due to her comparatively more hawkish, or at least neutral, outlook on UK interest rates compared to the dovish tone of the minutes. Speaking at Imperial College London, Forbes stated that;

‘Looking forward, I am not yet convinced that additional monetary easing will be necessary to support the economy. The behaviour of UK consumers and businesses, and evolution of prices, will be critically important in determining the appropriate action’.

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