Pound Canadian Dollar Rate Edges Higher, GBP EUR Dips

Published: Monday, 17 December 2012 18:00 BST - Written by Frank Davies

STORY LINK Pound Canadian Dollar Rate Edges Higher, GBP EUR Dips

Today’s session in the currency markets brought the release of two pieces of positive news for investors holding euro-denominated assets. The EU commission announced earlier that the 27-member euro area had clinched a trade deal with the influential island state of Singapore which will see the instigation of an official Free Trade Area between the two economies. Analysts have stated that the accord will be particularly beneficial for Europe’s car manufacturers, who are considered a key future driver of economic growth in the euroland.

There was further positive news earlier today when leading credit agency Fitch announced that it was set to maintain France’s AAA credit rating. Moody’s and S&P had cut France’s AAA credit rating earlier in the year, so Fitch’s action was seen as an encouraging vote of confidence in the state of the Gallic nation’s balance sheet.

Positive sentiment towards the single currency during this afternoon’s European trading day has seen the GBP EUR exchange rate once again tip the scales below the 1.2300 level. This leaves the pair within striking distance of its 7 ½ month low of 1.2247, a level which it last visited in the final week of April. Consecutive closes below this level would send out a firmly negative indicator for GBP EUR.

Elsewhere, the Pound has recorded a small gain against the Canadian Dollar this afternoon, following the release of a disappointing set of Canadian Existing Home Sales data for last month. The release showed that the number of exchanges of existing Canadian properties dropped by a monthly 1.7% in November – down from October’s reading of -0.1%. The news propelled the GBP CAD exchange rate briefly up above the psychologically key 1.6000 level. Further upside is possible for the pair if tomorrow morning’s UK CPI Inflation data for last month prints above the expected annualised level of 2.7%.

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TAGS: Canadian Dollar Forecasts Currency Predictions Euro Forecasts Euro Forecasts