British Pound to Canadian Dollar Exchange Rate Spikes Sharply as GBP/CAD Holds Advance After Dismal Growth Report

June 2, 2014 - Written by James Fuller

STORY LINK British Pound to Canadian Dollar Exchange Rate Spikes Sharply as GBP/CAD Holds Advance After Dismal Growth Report

At the close of last week the Pound Sterling to Canadian Dollar exchange rate (GBP/CAD) was able to advance by half a cent. Pound Sterling had been putting in a patchy performance all week but an impressive UK consumer confidence report had helped the currency turn the situation around and end on something of a high.

The Pound to Canadian Dollar pairing was also able to advance in response to disappointing Canadian growth data. The Canadian economy expanded by just 0.1 per cent in March, month-on-month, resulting in quarterly growth of 1.2 per cent – considerably less than the 1.8 per cent first quarter growth projected.

Toronto-based industry expert Darcy Browne had this to say of the report; ‘The GDP just disappointed in Canada [...] markets are traditionally built around expectations, and expectation wasn’t met on this number’.

Meanwhile a separate report revealed that Canada’s industrial product price index slid by 0.2 per cent in April.

Pound Sterling consolidates gains vs Candian Dollar

On Monday the Pound was able to consolidate gains against the Canadian Dollar as UK manufacturing PMI came in at 57.0 – in line with economists’ expectations and only slightly shy of the previous month’s reading of 57.3.

This week the major Canadian reports to be aware of include Wednesday’s international merchandise trade figures and Bank of Canada rate decision, Thursday’s building permits report and Ivey Purchasing Managers Index and Friday’s Canadian employment data.

The Pound Sterling to Canadian Dollar exchange rate is trading up +0.46% at 1.82553 GBP/CAD.

The Bank of Canada is expected to leave policy unaltered.

Forecast to show positive Canadian economy

Friday’s employment report is forecast to show that the Canadian economy added 21,500 positions in May. However, if the data delivers a negative surprise (like April’s Canadian employment report did) the ‘Loonie’ could end the week in a softer position.

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