July 17, 2019 - Written by John Cameron
STORY LINK Pound Canadian Dollar (GBP/CAD) Exchange Rate Steadies as Canadian Inflation Falls below Forecasts
GBP/CAD Exchange Rate Flat as BoC Inflation Data Fails to Impress
The Pound Canadian Dollar (GBP/CAD) stabilised against today, leaving the pairing fluctuating around CA$1.623.
The Canadian Dollar (CAD) steadied against the Pound (GBP) following the publication of the Bank of Canada’s year-on-year inflation data for June.
These fell below their forecast increase of 2.6% and came in at 2.0%, down against the previous 2.1%.
Month-by-month figures also fell flat, failing to confirm their 0.1% rise.
Doug Porter, a Chief Economist at BMO Capital Markets, said:
‘Inflation is obviously neither too hot or too cold at this point. It’s almost a nonfactor for the bank’s next move. In other words it doesn’t really constrain them one way or the other.’
Albert’s economy, however, is showing some signs of improving following last year’s extreme weakness in oil prices.
TD Economics said in its report:
‘All in all, recent encouraging data have added credence to the view that economic growth in Alberta is gaining some traction. While a continuation in this momentum would set the stage for a forecast upgrade, we remain cautious for now.’
GBP/CAD Exchange Rate Steadies as UK Inflation Data Holds at 2%
The Pound failed to make any against against the ‘Loonie’ following the release of the UK year-on-year inflation data for June.
These remained on target at 2%.
Monthly figures, meanwhile came in flat at 0%.
London house prices, meanwhile, fell at their fastest rate in a decade.
Paul Smith, the Chief Executive at Haart Estate Agents, said:
‘The Tory leadership battle is soon to come to a head. Whilst Boris’ proposals to cut stamp duty are attractive, the constant uncertainty and political instability is impacting property markets across the UK, with price growth slowing to just 1.2% this month.’
Meanwhile Brexit concerns have remained in focus following yesterday’s comments from the two Tory leadership hopefuls, Boris Johnson and Jeremy Hunt.
As they both hardened their position on Brexit, saying they would scrap the Northern Ireland backstop, despite the EU’s unwillingness to renegotiate this condition, UK markets have remained increasingly cautious.
GBP/CAD Forecast: Retail Sales and BoE’s Credit Conditions in Focus
Canadian Dollar traders will be looking ahead to tomorrow’s printing of the Canadian ADP Employment Change figures for June.
Any signs of improvement could provide some uplift for the ‘Loonie’.
The Pound, meanwhile could improve tomorrow if retail sales figures for June improve.
However, as they’re expected to ease, we could see the GBP/CAD exchange rate begin to slip.
Tomorrow will also see the publication of the Bank of England’s Credit Conditions Survey for the second-quarter.
If these indicate a dovish turn for the UK economy, this could further influence the Bank of England to consider rate cuts in the near-term and prove negative for the Pound.
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TAGS: Canadian Dollar Forecasts Pound Canadian Dollar Forecasts