GBP/CAD rates tumble

It seems that the post yesterday was right to stress caution and avoid gambling with the data released on UK interest rates. In the UK the decision on interest rates is conducted by the 9 members of the Bank of England Board, and a majority of 5 is necessary for an amendment to the base rate.

It was widely expected that 2 or 3 of the members would vote for a rate hike, getting us on the cusp of a majority after months where it was unanimously voted down. This was why GBP/CAD rates advanced to the brink of 2.06 at the start of the week, but now we find ourselves knocking on the door of 2.02, as only one member voted to raise rates, and confidence in the long term performance for Sterling has plummeted.

Today will be make-or-break for GBP/CAD rate and CAD strength in general against most major currencies over the next few weeks. Unemployment figures will be releases for the Canadian economy, showing overall unemployment rate as well as a more specific net change in employment.

Previously the figures came in poorly, with unemployment jumping to 6.8%, due to a loss of 6,500 jobs in June. July, however, is expected to make a turnaround. Analysts are expecting almost 10,000 jobs to be added as a result of investment in alternative energy, as well as non-energy sectors. It is hard to gauge what affect this will have on the overall employment rate, but should these come back in as expected then there are precious few data releases to cause the kind of weakness necessary to push GBP/CAD rates up higher than they already are.

Personally, if I had a requirement to buy CAD in the next few weeks, I would be looking to move ahead of this data release at 13:30 GMT to avoid disappointment by holding on. Call into +441494 787 478 and ask for Joshua for a free quote on your transfer. Alternatively, if your plans are more long-term (3 or 4 months) these rates can still be pegged at their current rates at no additional costs – email me on [email protected] for more information.