Exchange Rates Roundup: Pound Sterling Gains Against Canadian Dollar, US Dollar & Euro

Modified: Friday, 13 September 2013 15:08 BST - Written by Toni Johnson

STORY LINK Exchange Rates Roundup: Pound Sterling Gains Against Canadian Dollar, US Dollar & Euro

The Pound has strengthened against the Canadian Dollar as the market’s attention turns to next week’s US Federal Reserve policy meeting.

The Canadian currency has weakened for a second consecutive day against Sterling and its US relation after data released on Friday showed that the ratio of Canadian household debt to disposable income climbed to a record high in the second quarter of the year as consumers increased the amount of money borrowed for mortgages.

According to Statistics Canada, debt such as mortgages increased to 163.4% of income in the second quarter of the year. In the first quarter that figure was revised to 162.1%. The amount of money being borrowed for mortgages jumped to $1.11 trillion Canadian Dollars.

“There seems to be a risk-off tone today and the Canadian dollar is caught up in that,” said David Watt, chief economist at the Canadian unit of HSBC Holdings Plc. “It certainly seems like markets in general are tied up in knots right now over what the Federal Reserve is going to say next week.”

Uncertainty as to what the Fed may decide has crept into the markets after the USA posted worse than expected retail sales data. Combined with last week’s disappointing jobs data some economists are now thinking that the Fed may hold off from cutting its easing programme.

The Euro meanwhile came under pressure after Euro zone finance ministers met in Lithuania to discuss further reforms to strengthen the region's banking sector. The European Parliament approved legislation that would allow the European Central Bank to oversee banks in the Eurozone.

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TAGS: American Dollar Forecasts Canadian Dollar Forecasts Currency Predict Forecasts