The Canadian Dollar is looking resilient. Even last Friday’s weaker than anticipated growth data for Canada’s major trading partner, the US, failed to cause the CAD to weaken.
Foreign Currency Market Update – GBP / CAD Update
The GBP CAD rate has recovered from the 4-month low of 1.5545 which it reached on 17th January to rapidly trade back above 1.5800. However, the past week has seen Sterling’s recovery against the Canadian Dollar falter. The Pound has spent virtually the whole of the past seven days trading in a tight range between 1.5700 and 1.5800 against the CAD. It is possible that this is a period of consolidation for the GBP CAD rate before it heads back towards 1.6000 once more. Alternatively, this period in the doldrums could signal that Sterling’s mini-revival has run out of steam.
Last Tuesday’s Canadian Retail Sales numbers for November came out at slightly better than analysts had expected, showing a monthly improvement of 0.3%. However, the data was still considerably worse than October’s counterpart figure of 0.9%, hinting at a dropping off in demand from Canadian consumers. Meanwhile, last week’s UK data releases were far from supportive for the Pound. Wednesday proved to be a black day for investors holding Sterling, with two key releases apparently confirming that there are troubled times ahead for UK PLC. The minutes of the most recent Bank of England Monetary Policy Committee meeting suggested that an extension to the Bank’s asset purchase scheme is not far off, while UK GDP growth numbers showed that the British economy shrank by 0.2% in the last quarter of 2011, suggesting that a double-dip recession is not far off.
*Denotes the importance of the data item *** being the highest level.
** The latest GfK Consumer Confidence survey is released in the early hours of Tuesday morning. An improvement from December’s figure of -33 is expected.
** Tuesday morning sees the release of UK Mortgage Approval data for December.
** Wednesday, Thursday and Friday bring the release of the latest Purchasing Managers’ Index surveys for the UK’s Manufacturing, Construction and Services sectors respectively. The Services edition will be the most closely-watched.
*** Tuesday afternoon sees the release of Canadian GDP Growth figures for November – a monthly expansion of 0.2% is expected, with anything less likely to cause downside pressure for the CAD.
*** Canadian unemployment data for January is penned for release at Midday UK time on Friday. The rate of Canadian unemployment is expected to remain at 7.5%.
The Canadian Dollar is looking resilient. Even last Friday’s weaker than anticipated growth data for Canada’s major trading partner, the US, failed to cause the CAD to weaken. Canada’s currency remains firmly tethered to global appetite for risk thanks to Canada’s status as a major exporter of raw materials. Stock markets have started this week’s session tamely; if this continues, then the CAD could experience some downside pressure. The continuing absence of a debt deal between Greece and its creditors could also lead to investor sentiment to haemorrhage, causing further selling pressure on the Canadian Dollar. However, if Tuesday’s Canadian growth and Friday’s unemployment figures better expectations, then the CAD would firm up, causing the interim psychological floor of 1.5545 to hove into view for the GBP CAD rate.
- Pound Sterling to Canadian Dollar Foreign Currency Exchange Rate Forecast – CAD rallies on gold surge
- Pound to Canadian Dollar Forecast – The Pound has been down on its luck against the Canadian Dollar for the past month or more
- Pound Sterling to Canadian Dollar Foreign Currency Exchange Rate Forecast – The Canadian dollar had a good week
- Pound Sterling to Canadian Dollar Foreign Currency Exchange Rate Forecast – Sterling Rebounds from Technical Support
- Daily Foreign Currency Exchange Rate Forecast – The Pound recovered back above 1.16 against the Euro