Pound to Canadian Dollar Exchange Rate (GBP/CAD) Climbs on Bank of Canada Comments

Modified: Thursday, 18 July 2013 11:02 BST - Written by David Woodsmith

STORY LINK Pound to Canadian Dollar Exchange Rate (GBP/CAD) Climbs on Bank of Canada Comments

Sterling enjoyed a storming session in the currency markets yesterday, posting strong gains against all of the other sixteen most-actively traded global currencies. With the exception of the risk-shackled Japanese Yen, the Pound registered its largest gains against the Canadian Dollar.

The UK tender climbed across the board thanks to the surprise revelation yesterday morning that the Bank of England’s nine-man policy committee had voted unanimously not to increase Britain’s controversial Quantitative Easing programme. Sterling gained as the laws of supply and demand took a hold on the relative value of the UK unit.

The forward move for the Pound to Canadian Dollar exchange rate (currency : GBP CAD) was partly due to a strengthening of the Pound, however the fact that GBP CAD market outperformed on the day was largely attributable to a pronounced weakening of the Loonie following comments from the Bank of Canada. Although the Canadian central bank opted to maintain its overnight interest rate at its current level of 1.00% as per expectations, the tone of the accompanying rhetoric from new BoC Governor Stephen Poloz, who took over from former Governor Mark Carney a few weeks ago, suppressed the Canadian unit on the day. Poloz issued strong indications to the nation’s borrowers and consumers that his bank will not be hiking its key lending rate any time soon. The development is likely to suppress the Loonie for the remainder of the year.

Elsewhere, the US Dollar also suffered pronounced downside on the day thanks to comments from Federal Reserve Chairman Ben Bernanke during his biannual testimony to the lower house in the States. Bernanke reiterated his comments of last week regarding the US’s Quantitative Easing programme, stating that a reduction in asset purchase was not a ‘present course’ for the Fed at this stage. The Greenback slumped as a result, sending the Pound Dollar exchange rate (GBP USD) up to as high as 1.5268 before the end of the North American equities session.

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