Currency News

Daily Exchange Rate Forecasts & Currency News

Pound Sterling Canadian Dollar (GBP/CAD) Exchange Rate Muted as BoE Leaves Interest Rates on Hold

September 19, 2019 - Written by John Cameron

Pound Canadian Dollar (GBP/CAD) Exchange Rate Flat as BoE Warns against Further Brexit Uncertainty

The Pound Sterling Canadian Dollar (GBP/CAD) exchange rate was left muted and the pairing is currently trading at around CA$1.6559.

On Thursday, the Bank of England (BoE) left interest rates on hold for the 13th month in a row.

Sterling remained muted against the Canadian Dollar as the bank noted that continued Brexit uncertainty and slowing global growth stopped the economy reaching its potential.

The BoE also noted that failure to achieve a Brexit deal and exit the European Union by the deadline could cause weaker growth.

The bank’s minutes stated:

‘In the event of a no-deal Brexit, the exchange rate would probably fall, CPI inflation rise and GDP growth slow.’

Commenting on the BoE’s decision, Head of Equities at London & Capital, Rodger Jones noted:

‘No surprises from the Bank of England today but the tone is more dovish with the statement making reference to falling inflation. This represents an about-turn from comments made earlier this year when the Bank of England tried to present a more hawkish tone.’

Canadian Dollar (CAD) Muted as 50,000 Jobs Added to Canadian Economy

The Canadian Dollar remained muted against Sterling as data revealed the Canadian economy added close to 50,000 jobs in August.

According to ADP, an increase in hiring in the trade, transportation and utilities sectors led the gain of 49,300 jobs.

Commenting on this, vice president and co-head of the ADP Research Institute, Ahu Yildirmaz said:

‘August reported broad gains nearly across all industries. Trade, Transportation and Utilities; Education; Business and Professional Services; and Leisure and Hospitality reported the strongest jobs growth, while Natural Resources and Finance reported losses.’

However, the ‘Loonie’ was left under pressure as the number of jobs added to the economy in July was revised down to 30,200 from 73,700.

Meanwhile, Thursday saw oil prices rise sharply as the market assessed the fallout from last week’s drone attacks on Saudi Arabia’s oil facilities.

This likely offset the effects of the employment data, providing a slight upswing of support for the oil-sensitive ‘Loonie’.

Pound (GBP) Left Flat as Retail Sales Disappoint

Meanwhile, on Thursday morning data revealed that August’s UK retail sales slumped as British consumers grew increasingly cautious ahead of the Halloween Brexit deadline.

Sales fell by a lower-than-expected -0.2% as shoppers spent less money online.

However, Tom Leman, head of retail at Pinset Masons suggested these monthly stats ‘do not tell the full story’.

Leman noted:

‘The challenging global political environment makes it difficult to make too many assumptions, from these figures, about the health of the retail sector.

‘The threat of a no-deal Brexit makes it almost impossible to predict retail sales and consumer spending in September and October.’

Pound Canadian Dollar Outlook: Will Retail Sales Buoy CAD?

Looking ahead to Friday, it is likely the Canadian Dollar (CAD) will edge up against the Pound (GBP) following the release of Canada’s retail sales data.

If July’s retail sales rise higher than forecast, rebounding from June’s stagnation, the Pound Canadian Dollar (GBP/CAD) exchange rate is likely to slide.

Like this piece? Please share with your friends and colleagues:

International Money Transfer? Ask our resident FX expert a money transfer question or try John's new, free, no-obligation personal service! ,where he helps every step of the way, ensuring you get the best exchange rates on your currency requirements.

TAGS: Pound Canadian Dollar Forecasts

Comments are currrently disabled