Improved sentiment towards the Canadian currency saw the GBP CAD exchange rate tumble to 1.5874 in early trading today.
Foreign Currency Market Update – GBP / CAD Update
The first four sessions of last week saw the GBP CAD exchange rate suffer sustained losses, as the pair continued to head lower following its brief visit above the 1.6200 level in the second week of last month. However, the downward move was halted on Friday when the Canadian Dollar suffered a double blow in the form of weak Canadian GDP growth data for March and disappointing US labour market data for last month – bad news for Canada’s exporters.
Earlier on Friday, the GBP CAD exchange rate had dipped to 1.5866, its lowest level since 25th April. However, the dual negative data releases on Friday afternoon saw the CAD sell off, seeing the Pound recover to trade back above the 1.6000 level before Friday’s market close.
This week’s session has seen market participants’ fears over the eurozone’s ongoing debt crisis recede, following resolute comments from European policy-makers suggesting that deeper fiscal and political union and further monetary easing will be required in the troubled region in order to avoid a fully-blown debt meltdown. The mere suggestion of positive action from Europe’s leaders has been sufficient to send global stock markets higher as investors price-in a lower chance of Europe triggering a worldwide slowdown in economic activity. This was music to the ears of investors holding CAD-denominated assets due to Canada’s heavy reliance on the export of raw materials to fuel the industries of its trading partners.
Improved sentiment towards the Canadian currency saw the GBP CAD exchange rate tumble to 1.5874 in early trading today. However, the pair narrowly avoided breaking to a new 6-week low when the Bank of England announced at midday that it would not be extending the £325bn currently allocated to its asset purchase programme, causing a mini relief rally for Sterling. However, the respite for the Pound may prove temporary, and if GBP CAD re-establishes it downtrend, then the pair’s 8 ½ month low of 1.5464 will hove into view.
Summary of major upcoming data releases that we think may move the market.
- Pound Sterling to Canadian Dollar Foreign Currency Exchange Rate Forecast – The Canadian dollar had a good week
- The Pound had registered gains against the CAD in six of the seven sessions leading up to the release of last Friday afternoon’s Canadian employment figures
- The Canadian Dollar came under selling pressure in the early part of the week
- Pound Sterling to Canadian Dollar Foreign Currency Exchange Rate Forecast – CAD rallies on gold surge
- The Pound tested lower against the Canadian Dollar during last week’s session