Pound Sterling to US Dollar, Canadian Dollar Exchange Rates Rally on Positive British Data
GBP/USD Conversion Rate Predicted to Rally after US Manufacturing Output Contracted
The Pound Sterling to US Dollar (GBP/USD) exchange rate advanced by around 0.8% on Monday afternoon.
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After British economic data produced mostly positive results the Pound Sterling advanced versus nearly all of its most traded peers. Of particular significance, in terms of supporting demand for Sterling, was UK factory output data. The Manufacturing PMI bettered the market consensus of a drop from 52.1 to 51.6, with January’s actual result reaching 52.9. The headline figure masks concerns, however, amid a lack of new export orders. December’s Mortgage Approvals also bettered the median market forecast.
The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.4355.
Over the Pond, the US Dollar slumped versus nearly all of its major rivals after US factory output remained in contraction territory. January’s ISM Manufacturing failed to meet with the market projection of a rise from 48.0 to 48.4, with the actual result only reaching 48.2. However, traders were encouraged by news that new orders has picked up. ‘This may be signalling the start of some stabilization in manufacturing activity and U.S. economic activity,’ said Millan Mulraine, deputy head of US research and strategy at TD Securities USA LLC in New York. ‘It’s good enough to know things haven’t gotten worse. The rise in new orders is encouraging.’
GBP/CAD Conversion Rate Predicted to Surge as Oil Prices Fall
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate rallied by around 1.1% on Monday afternoon.
In response to the British factory output data, David Noble, Group Chief Executive Officer at the Chartered Institute of Procurement & Supply stated; ‘The domestic market continued to buoy up manufacturing growth as the year starts in a positive, if slightly reserved fashion. Though the PMI survey has generally signalled growth of production and new orders through much of the past three years, January also saw respondents cite increased competition, challenging exchange rates and a more difficult marketplace as factors making it increasingly difficult to win new contracts and protect margins hard won in recent months.’
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate is currently trending in the region of 2.0100.
Oil prices pared some recent gains during Monday’s European session following weak manufacturing data out of China and a report from OPEC showing global stockpiles continue to swell. As an oil exporting nation, Canada has been one of the hardest-hit economies from the drop in global crude prices. With an absence of domestic data to encourage changes, the ‘Loonie’ (CAD) is likely to hold losses versus the majority of its most traded currency peers.
Pound Sterling (GBP) Exchange Rates Forecast to Fluctuate ahead of ‘Super Thursday’
This week, trader focus is likely to be dominated by the Bank of England’s ‘Super Thursday’ which will see the inflation report published in conjunction with the interest rate decision and accompanying meeting minutes. Whilst policymakers are not expected to make any changes at this time, there is potential for volatility in response to the meeting minutes if policymakers continue to cite global economic difficulties as a reason to delay a cash rate increase. The inflation report is far more likely to stir up GBP changes given that weak consumer prices have been the principle argument for policymakers to keep the benchmark interest rate unchanged. Ahead of ‘Super Thursday’, Tuesday’s Construction PMI and Wednesday’s Composite and Services PMIs will be likely to stimulate Sterling changes.
The Pound Sterling to US Dollar (GBP/USD) exchange rate was trending within the range of 1.4233 to 1.4379.
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate was trending within the range of 1.9901 to 2.0176 during Monday’s European session.