Pound Sterling to Canadian Dollar (GBP/CAD) Exchange Rate Forecast: Oil Price Rally Boosts ‘Loonie’
With oil prices trending higher the Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate has remained in a slump on Friday, in spite of positive UK data.
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Lack of BOC Interest Rate Cut Pushed Pound Sterling to Canadian Dollar (GBP/CAD) Exchange Rate Lower
Defying speculation that a rate cut might be in the offing, the Bank of Canada (BOC) opted to leave interest rates unchanged at Wednesday’s policy meeting, bolstering the Canadian Dollar (CAD) against rivals. Policymakers on the whole appeared rather more optimistic than pundits had generally anticipated, downplaying the impact of the current oil supply glut on domestic growth and highlighting the economy’s continuing shift away from commodities. Consequently the Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate slumped further, with the Pound already dented as a result of the more dovish tone of Bank of England (BoE) Governor Mark Carney.
Canadian Dollar (CAD) Rallies with Crude Oil Back Above $30 Today
Although the mood on global stock markets has remained more cautious this week, Brent crude has nevertheless staged something of a recovery, breaking back above the $30 mark after Saudi officials took a more positive view of a potential oil price rebound in the coming year. With crude generally climbing away from the region of its recent twelve-year lows the ‘Loonie’ has equally been staging a rally across the board. Pundits are equally optimistic ahead of this afternoon’s Canadian Consumer Price Index data, which is expected to show a modest uptick in domestic inflationary pressure.
Demand for the Pound (GBP), meanwhile, has been on the rise in the wake of a better-than-expected Public Sector Net Borrowing figure, which showed that new government debt in December had clocked in at 6.9 billion rather than 10.0 billion Pounds. As this bodes a little better for the outlook of the UK economy, and Chancellor George Osborne’s attempts to reduce the national deficit, the more bullish result outweighed a disappointing December Retail Sales report. Nevertheless, the relative strength of the Canadian Dollar has kept the GBP/CAD exchange rate on a downtrend today.
GBP/CAD Exchange Rate Forecast: Strengthening Canadian Inflation to Support ‘Loonie’ Uptrend
Should the latest Canadian inflation data prove as strong as investors are anticipating, the ‘Loonie’ is likely to remain on bullish form going into the weekend, equally providing that oil prices can maintain their current recovery throughout the rest of the European and American sessions. If market bearishness prompts a turnaround, however, the GBP/CAD could stand to recover some of its lost ground this afternoon.
Current GBP, CAD Exchange Rates
At the time of writing, the Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate was slumped around 2.0231, while the Canadian Dollar to Pound Sterling (CAD/GBP) pairing was making gains at 0.4938.