Best Conversion Rate Outlook: Gains Forecast for Pound Sterling against Canadian Dollar, Australian Dollar & New Zealand Dollar

July 15, 2015 - Written by Toni Johnson

STORY LINK Best Conversion Rate Outlook: Gains Forecast for Pound Sterling against Canadian Dollar, Australian Dollar & New Zealand Dollar

Pound Sterling (GBP) Forecast to Achieve Best Conversion Rates against CAD, AUD, EUR

Price action in the global currency markets has been marked by wild gyrations during this afternoon’s European session. Experts forecast that this situation may persist into next week.

Investors were already jittery thanks to the delicate situation in Greece by the time that the Bank of Canada (BoC) announced that it will be trimming its key interest rate by 25 basis points from 0.75% down to a lowly 0.50% earlier this afternoon. To add insult to injury, the statement accompanying the decision from the BoC observed that levels of Canadian economic growth are, ‘now projected to have contracted modestly in the first half of the year.’

BOC Cuts Interest Rates, Canadian Dollar Plummets Today, GBP/CAD, USD/CAD, EUR/CAD all Gain

The admission from the Canadian central bank that its local economy has slipped back into recession thanks to the continuing bargain basement levels of global oil prices is likely to suppress support for the Loonie moving forward. The market’s instant reaction to the news saw the Pound Sterling Canadian Dollar exchange rate jump to a fresh 6 ½ year high of 2.0149 GBP CAD a short time ago – not since the time that Lehman Bros. Went under has the Pound traded so high against its Canadian counterpart currency.

Foreign Exchange Predictions for Major Currency Conversion Rates

The Canadian Dollar tends to be grouped together with other similar currencies including the Australian Dollar (currency:AUD) and the New Zealand Dollar (currency:NZD) as one of the ‘Commodity Dollars’, so the BoC’s decision had reverberations well beyond Canada’s shores. The news from North America caused market participants to price in a higher percentage chance that the Reserve Bank of Australia and the Reserve Bank of New Zealand will hike their respective costs of borrowing before the end of the year. The attendant market moves have seen the Pound Sterling Australian Dollar exchange rate climb to a new 6-year high above the 2.1100 GBP AUD threshold this afternoon. Meanwhile, GBP NZD has jumped to its highest level since the Autumn of 2009. Analysts forecast the Sterling is set to register further near-term gains against the Commodity Dollars moving forward.

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