Canadian Dollar to Pound (CAD/GBP) Exchange Rate Gains on Canadian Housing Construction
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The Canadian Dollar has been able to rise against Sterling this week following favourable housing figures for Canada on Monday and disappointing UK data releases in the latter few weeks.
Canadian Housing Starts numbers bettered economists’ forecasts showing a total of 200.1K houses being constructed. Furthermore, economists had only predicted 193.0K in July, a dip in comparison to June’s 198.7K.
Monday’s housing construction figure comes as a welcome surprise, showing the economy is growing slightly more rapidly than expected; following speculation that the Canadian economy is flagging in growth in comparison to the US economy.
Canadian economist at HSBC David Watt commented: ‘I’m sure the Fed goes into their meetings with a bit of a spring in their step nowadays, and the Bank of Canada probably goes in with some long faces.’
However, Canadian figures of late have shown a slowing in the employment sector; Canada was renowned as the quickest economy to emerge from recession following the great financial crisis in 2009, with a wealth of Canadian jobs created.
Expert in the field David Tulk stated: ‘It’s an awkward straddling of two different engines of growth. It does for the time feel uncomfortable because a big part of Canada is cooling and waiting for this smaller part to make up for lost time.’
The Pound however is trading amid uncertainty. The Bank of England (BoE) meeting minutes due to be released in the coming weeks are eagerly anticipated to show the result of the recent vote for interest rate hikes. If the vote proves to be split, this will signal the first time since 2011 that the vote hasn’t been unanimous.
However with the Scottish vote for freedom looming, the Pound is under further pressure as a break for Scotland away from the UK would signal a drop in Sterling.
Wednesday will prove influential for the Pound with a wealth of UK data published including Average Weekly Earnings, Jobless Claims and Unemployment Rate which may affect the Canadian Dollar to Pound exchange rate.
Furthermore the highly influential Bank of England Inflation Report is scheduled for release on Wednesday which could boost the Pound greatly in the currency market if favourable. Furthermore this could push the Canadian Dollar to Pound currency pairing lower if the Pound appears to be set to embark on another rally.
The present GBP to CAD exchange rate is trending at 1.8354.