Pound Sterling Canadian Dollar Exchange Rate Rises as Commodity Costs Leave ?Loonie? Soft

September 27, 2016 - Written by James Fuller

STORY LINK Pound Sterling Canadian Dollar Exchange Rate Rises as Commodity Costs Leave ?Loonie? Soft

British Pound News: Gains for GBP after WTO Offers Post-Brexit Light

The Pound has managed to advance against the Canadian Dollar and make a number of other gains today, although more cautious investors remain wary that this situation will be only temporary for Sterling.

The latest UK domestic data has actually been broadly negative, with the Confederation of British Industry (CBI) distributive trades result for September falling from 9 points to -8.

In broader terms, this equated to -38% of shops reporting falling sales, compared to only around 30% reporting growth.

More positively, the Pound managed to rise in response to broader UK news, which consisted of the World Trade Organisation estimating that no UK recession would come in 2017, although a slowdown in growth was still forecast.

Future GBP Forecast: BoE Contributions and GDP Stats due in Near-Term

The near-future for UK economic announcements will be made up of Bank of England (BoE) input, consisting of a speech from Nemat Shafik on Wednesday morning and from the Financial Policy Committee minutes on the coming Monday.

Elsewhere, the Pound could also be influenced on the coming Friday when the Q2 GDP growth rate results come in. These will be finalised, therefore will paint the most accurate picture of how the UK economy was faring before the Referendum.

Also due in the coming week will be the UK manufacturing, construction and services PMIs for September, which are all forecast to move to or remain in the 50-plus growth range.

Canadian Dollar News: Losses seen for ‘Loonie’ on Commodity Costs

The Canadian Dollar has failed to capitalise on recent election-triggered weaknesses in the US Dollar, instead falling against its rivals on account of dropping commodity prices.

In particular, the costs of gold per 100 ounces and crude oil per barrel have both declined, to $1329.5 and $44.34 respectively.

Elsewhere, Bank of Canada (BOC) Governor Stephen Poloz has stated that increased trade across the world is having a profound influence on both Canadian and global monetary policy decisions and their effectiveness.

Canadian Dollar Outlook: Manufacturing PMI, Trade Balance Results and Unemployment Figures Incoming

Having been in a relative dry spot when it comes to domestic data announcements, Canada is set to release a glut of high-impact data next week, starting with Monday’s RBC manufacturing PMI for September; this is forecast to dip slightly.

Wednesday will bring the pessimistically-predicted August balance of trade result, while Thursday’s major contribution will be the September housing starts result.

Closing off next week’s data releases will be the September unemployment rate and unemployment change figures; despite a predicted rise in the number of employed persons, no rate shift is forecast from 7%.

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TAGS: Canadian Dollar Forecasts