Canadian Dollar to Pound (GBP/CAD) Exchange Rate Stronger, CAD/USD Fluctuates after US News
With economic reports for the UK and Canada thin on the ground today, the CAD/GBP exchange rate was trading in a fairly narrow range.
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On Friday the ‘Loonie’ surged in response to surprisingly upbeat Canadian inflation and retail sales figures, with the CAD/GBP pairing jumping by over 0.50%.
While the Canadian Dollar has since come away from these recent highs against the Pound, it continues to trade in a strong position despite ongoing speculation regarding the prospect of a Bank of England rate increase taking place this side of Christmas.
The ‘Loonie’ was boosted during the Australasian session as a report showed that China’s manufacturing sector returned to growth.
As China’s HSBC Manufacturing PMI came in at 50.8 rather than 49.7, as forecast, commodity-driven currencies like the Canadian, Australian and New Zealand Dollars were all supported overnight.
HSBC economist Hongbin Qu issued the following statement with the figures; ‘This month’s data is consistent with data suggesting that the authorities’ mini-stimulus are filtering through to the real economy. Over the next few months, infrastructure investments and related sectors will continue to support the recovery. We expect policy makers to continue their current path of accommodative policy stance until the recovery is sustained.’
The Canadian Dollar also maintained a stronger position against the US Dollar for much of the local session on Monday.
The US Dollar was feeling the heat as investors focused on last week’s dovish commentary from the Federal Open Market Committee, and the ‘Greenback’ consequently failed to post any notable gains when domestic reports topped forecasts.
The US Markit Manufacturing PMI came in at 57.5 in June, well clear of the 50 mark separating growth from contraction and much stronger than the anticipated level of 56.4.
Meanwhile, US existing home sales increased by 4.9% in May, month-on-month. This smashed the previous month’s revised figure of 1.5% and was considerably higher than the monthly increase of 1.9% anticipated.
The housing report saw economist Tom Simons comment; ‘I’m confident that the housing recovery is going to continue. Income levels are going up, rates are at least not going up anymore, and prices are stabilising, so all that blends into a good picture for affordability.’
Over the next few days any major movements in the Canadian Dollar are most likely to occur in response to global economic developments as influential Canadian data is lacking.
That being said, some modest ‘Loonie’ volatility could be occasioned by the nation’s own Industrial Product Price and Raw Materials Price Index (out on Friday) as well as Canada’s Average Weekly Earnings figures (due for publication on Thursday).
The Canadian Dollar is trading against the British Pound in the region of 0.5477 and against the US Dollar in the region of 0.9316.