Pound Sterling to Canadian Dollar (GBP/CAD) Exchange Rate Advances as ‘Loonie’ Hit by Fed Rate Hike
A combination of a strengthening US Dollar (USD) and a continued fall in oil prices has allowed the GBP/CAD exchange rate to advance on the back of optimism surrounding David Cameron’s negotiations with the EU.
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GBP/CAD Exchange Rate Trends Down Despite Yesterday’s Strong Retail Sales Figures
Despite less chaotic scenes from this year’s Black Friday sales, consumer spending rose significantly. According to figures released yesterday, retail sales increased 3.9% year-on-year in November, beating forecasts of a slump to 2.3%. Sales including auto fuel jumped 5.0%, up from 4.2% previously. After sales slumped in October, declining -0.8% month-on-month as consumers waited for Black Friday, November’s monthly sales surged past the expected 0.5% rate to 1.7%. Department stores saw the biggest monthly increase in sales in just under two years, with growth of 3.4%, while household goods saw a 4.1% increase.
In further positive news for Pound Sterling, David Cameron has expressed his confidence in securing a good deal for the UK as negotiations continue in Brussels over the Prime Minister’s proposed reforms. Mr Cameron wants to protect the UK from further political integration and legislation and see migrants having to live and work in the UK for four years before being eligible to claim benefits.
According to the Prime Minister: ‘Nothing is certain in life or in Brussels but there is a pathway to a deal in February.’
Pound Sterling has made 0.2% gains against the ‘Loonie’ (CAD), with the GBP/CAD exchange rate trending in the region of 2.0795.
CAD/GBP Exchange Rate News: Canadian Dollar Still Weakened by US Interest Rate Hike
The Canadian Dollar has continued to lose value today after the Federal Reserve moved to strengthen the US Dollar by raising interest rates to 0.50%. A strong US Dollar is bad news for Canada, as the States is a major trading partner. A more valuable ‘Buck’ (USD) combined with a weak ‘Loonie’ (CAD) means that US importers can buy more from Canadian exporters for the same price, while Canadian importers will find themselves having to pay higher rates.
The Canadian Dollar is also feeling the drag of the rapid decrease in oil prices, with the WTI index dropping from US$41.68 per barrel in November to $34.95, a 13 year low. Some experts have predicted oil will hit $20 per barrel in 2016, a level that hasn’t been since the end of the 90s.
The CAD/GBP exchange rate is currently trading in the region of 0.4796.
GBP/CAD Exchange Rate Forecast: Canadian Inflation Data Could Give ‘Loonie’ a Much-Needed Boost
Despite the current drags on the Canadian economy, today’s core Consumer Price Index figures are expected to rise from 2.1% to 2.3% year-on-year (YoY), while the non-core index is anticipated to increase from 1.0% to 1.5%. With no data available for the UK today, the Canadian Dollar may have a chance to advance if the figures print positively.
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate is currently trending between 2.0739 and 2.0839.