Pound to Canadian Dollar Exchange Rate (GBP/CAD) Spirals On Bank Of Canada Comments

Modified: Thursday, 24 October 2013 09:41 BST - Written by Frank Davies

STORY LINK Pound to Canadian Dollar Exchange Rate (GBP/CAD) Spirals On Bank Of Canada Comments

The Pound Canadian Dollar exchange rate (GBP/CAD) shot up yesterday thanks to a change of policy from the Bank of Canada. Meanwhile, this afternoon could bring movement for the Pound US Dollar exchange rate (GBP/USD) with the release of US jobs data.

The Pound Canadian Dollar exchange rate (GBP/CAD) is currently trading up by 0.52% at 1.6786 GBP/CAD. The Canadian Dollar Pound exchange rate is currently trading at 0.5957 CAD/GBP.

The Canadian Dollar came under heavy selling pressure during the latter part of yesterday afternoon’s session following a surprise volte face from Canada’s central bank. The Loonie gave up ground hand over fist following a press conference from the Bank of Canada’s Governor Stephen Poloz which contained news of a cut to his nation’s growth forecast moving forward. Poloz was speaking after the announcement from the Bank of Canada that its key lending rate will be remaining at 1.00% for another month, as per analysts’ expectations.

However, what was less expected was Poloz’s assertion that the economic situation had become ‘less favourable’ for Canada since he had last addressed the nation. The most significant action of all came in Poloz’s ditching of the Bank of Canada’s long-standing policy tightening bias. The BoC has asserted for the past 18 months that its next major policy move would be to hike interest rates, buts yesterday’s comments from Poloz confirmed that a cut is now equally as likely given the current economic landscape in North America. The Pound Canadian Dollar exchange rate (GBP/CAD) rapidly broke to above the 1.6800 level before pulling back slightly following these comments. A move above its existing 44-month high would now appear likely sooner rather than later for the pair.

Elsewhere, today’s session bring a quiet roster of global economic data releases. The highlights once again come from North America in the form of the latest US Initial Jobless Claims and Continuing Claims numbers. Although these are weekly releases, any American jobs figures are closely monitored these days thanks to the US Federal Reserve’s insistence that domestic labour market conditions will need to improve before it will countenance a cut in the monthly $85bn which it is allocating to its controversial Quantitative Easing programme.

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