British Pound to Canadian Dollar (GBP/CAD) Exchange Rate Forecast: Canadian Building Permits Plummet
The British Pound to Canadian Dollar (GBP/CAD) exchange rate advanced by over 0.4% before the release of the UK’s Gross Domestic Product estimate for September, benefiting from some disappointing Canadian data.
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The Pound Sterling exchange rate was little-affected by the UK’s Manufacturing and Industrial Production stats, both of which recorded a slowing in growth from July to August.
On Monday the Canadian Dollar was boosted by a better-than-forecast Ivey PMI reading. The commodity-driven asset reversed gains on Tuesday however as the number of building permits issued in Canada declined markedly.
During the North American session figures compiled by Statistics Canada showed that the value of permits plummeted in August, shedding 27.3% from July – the most significant monthly decline since 1982.
Economists had expected a shallower -6.5% decline to follow July’s negatively revised 11.6% increase
According to Statistics Canada; ‘In the non-residential sector, the total value of building permits decreased 40.6% to $2.5 billion in August, following four consecutive monthly gains. Lower construction intentions were posted in seven provinces, with Quebec contributing most to the national decline.
After five consecutive monthly advances, the total value of permits in the residential sector declined 15.9% in August to $4.2 billion. The largest decreases were registered in Ontario, followed by British Columbia and the Atlantic provinces. Gains were recorded in four provinces, led by Alberta.’
The report saw Toronto-based economist Robert Kavcic comment; ‘We have come off the boil a little bit.’
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate hit a high of 1.8015
The GBP/CAD exchange rate was able to consolidate its advance following the publication of the National Institute of Economic and Social Research’s UK GDP estimate for September.
Although the institute believes the pace of growth slowed slightly in the third quarter of the year, the 0.8% figure estimated for the three months from June to August was upwardly revised from 0.6%.
NIESR envisages expansion of 0.7% in the three months through September.
Pound Sterling to Canadian Dollar (GBP/CAD) Exchange Rate Forecast
While the British Retail Consortium’s Shop Price Index could have an impact on the GBP/CAD exchange rate tomorrow, movement in the currency pairing is more likely to be driven by Canadian Housing starts data.
An increase from 192,400 to 197,800 is expected.
Of course, Friday will also be a key for any investors with an interest in the Pound to Canadian Dollar exchange rate as Canada will release its employment figures.
Strong growth in the Canadian employment sector could see the GBP/CAD exchange rate end the week trending lower.