The GBP CAD exchange rate traded down to within a fraction of a cent of its 11-month low at 1.5479

By on August 15th, 2012.
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The GBP CAD exchange rate traded down to within a fraction of a cent of its 11-month low at 1.5479Looking ahead to the remainder of this week, if global data releases continue to provide evidence that the economic activity is slowing, then there could be further selling pressure on the CAD.

Foreign Currency Market Update – GBP / CAD Update

As last week’s session ended, the GBP CAD exchange rate traded down to within a fraction of a cent of its 11-month low at 1.5479. Significantly, the pair’s reaction to the downside move was to rapidly reject rates in the 1.5400s to finish the week back in the mid-1.50s.

The dip lower for the Canadian Dollar was triggered by sustained selling pressure on the Pound following Wednesday’s grim prediction by the Bank of England regarding the future prospects for the UK economy. The BoE’s inflation report saw the official 2012 GDP growth forecast for the UK economy slashed from the previous projection of 0.8% to 0.0%. However, the negative sentiment regarding the Pound was overshadowed by Friday afternoon’s disappointing Canadian employment data, which showed an unexpected increase in the rate of unemployment in Canada last month to 7.3% from June’s 7.2% reading.

The Canadian Dollar has remained out of favour in the currency markets as this week’s session got underway, following Sunday night’s anaemic Japanese Q2 GDP growth figures which came out well below par. These numbers built on disappointing Chinese trade and industrial production numbers, released in the latter half of last week, to give the impression that the Far East’s leading economies are slowing down. This spells bad news for the Canadian economy, which remains dependent on the export of its raw materials in order to prosper.

Looking ahead to the remainder of this week, if global data releases continue to provide evidence that the economic activity is slowing, then there could be further selling pressure on the CAD. This has the potential to send the GBP CAD exchange rate back up towards the 1.5700-1.5900 band where it spent almost the whole of last month. However, if market babble regarding the eurozone’s debt crisis remains subdued then it would appear highly possible that there could be a renewed move lower for GBP CAD. Consecutive closes below 1.5409, setting a new 12-month low, would be a particularly negative sign for the pair.

Heads Up

Summary of major upcoming data releases that we think may move the market.

Related posts:

  1. Pound to Canadian Dollar Forecast: The GBP CAD exchange rate held below its 7-month high of 1.6206
  2. The GBP CAD rate has recovered from the 4-month low of 1.5545
  3. Pound to Canadian Dollar Forecast: The Pound fell to a 4-month low of 1.5686 against the Canadian Dollar
  4. Pound to Euro, US Dollar exchange rate: Sterling was able to push ahead on Friday and post a 1.25 cent gain
  5. Pound to Euro, US Dollar exchange rate: The Pound lost out on half a cent to the US Dollar

Article source: http://feedproxy.google.com/~r/ForeignExchangeOutlook/~3/ARYDy0bCe3A/

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