The start of this week’s session has seen GBP CAD on the front foot once more, as investors’ concerns over the Greek debt crisis escalate.
Foreign Currency Market Update – GBP / CAD Update
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, taking the GBP CAD exchange rate to 1.6206, its highest level in five and a half months. Analysts had anticipated that the labour market numbers would reveal that a modest 10,000 jobs had been created in Canada’s economy in April, so it came as a massive shock to market participants when the figure showed at nearly six times this number, to print at 58,200. This saw GBP CAD pull back to trade close to the 1.6000 level once again just before the currency market’s weekend shut down on Friday night.
The latest Canadian labour market data revealed that a combined 140,500 new positions had been generated in the country’s economy from the start of March until the end of last month. This is the largest number of jobs which the Canadian economy has created in any two month period for over three decades, suggesting that the nation’s export-led economy is managing to weather the apparent renewed global slowdown better than had previously been anticipated.
The Pound had enjoyed a strong upward momentum in the twenty four hours leading up to the release of the Canadian labour market data, following the Bank of England’s decision not to extend the £325bn already committed to its Quantitative Easing programme.
The start of this week’s session has seen GBP CAD on the front foot once more, as investors’ concerns over the Greek debt crisis escalate. With it looking increasingly unlikely that a coalition government will be formed in the debt-addled Hellenic state before Thursday’s state opening of parliament, the most likely outcome of last week’s general election looks to be the calling of another general election next month. If opinion polls suggest that the Greek people will vote for an anti-bailout government, then the knock-on effects could be disastrous for the Canadian economy, due to its reliance on the export of raw materials. This scenario could see GBP CAD eye its 27-month high of 1.6475. Conversely, if Friday afternoon’s Canadian inflation figures beat expectations of an annualised 1.9% showing, then talk of a Canadian interest rate hike may gather pace, sending GBP CAD back down towards mid-March’s key interim floor of 1.5464.
Summary of major upcoming data releases that we think may move the market.
- Canadian Dollar Foreign Exchange Rate Forecast – Canadian second quarter growth figures due out today
- Pound Sterling to Canadian Dollar Foreign Currency Exchange Rate Forecast – The Canadian dollar had a good week
- Pound to Canadian Dollar Forecast – The Canadian Dollar has started this week’s session firmly under the cosh
- Pound to Canadian Dollar Forecast: The Canadian Dollar struggled to re-assert itself in the currency markets
- Pound to Canadian Dollar Forecast – The Canadian Dollar weakened against the Pound during the first half of last week’s trading session