After hitting an 8-day high against the US dollar earlier this week, the CAD/USD exchange rate has since dropped off in value after some data releases out of the US last night reduced appetite for the Loonie along with a drop in oil prices.
US Fed to ‘wait and see’ before adjusting interest rates
The Federal Reserve Bank in the US last night put to rest any hopes of an interest rate cut later in the year whilst outlining the banks plans to continue to ‘wait and see’ how the economy performs before making any further amendments. CAD dropped off as a result and the price of oil has also dropped recently by almost 4% over the past week which has taken its toll on CAD’s value.
As a result, the pound to Canadian dollar rate has risen and it currently sits just below it’s annual high of 1.7795, with the pair currently trading just below 1.76. The pound has been gaining in value across the board of major currency pairs recently also, as hopes and rumours of talks progressing between the Conservative and Labour leaders on the Brexit deal are picking up momentum.
Data releases from Bank of England today
Later today at lunchtime there will be a number of data releases from the Bank of England. The interest rate decision along with the Minutes and Governor Mark Carney’s speech will all take place and I expect any references to future monetary policy to result in movement for the pound. As it stands, financial markets are not pricing in a rate amendment until mid-2021, and prior to this expectation the next hike had been outlined for mid-2024 so a change of tone from the BoE could impact Sterling exchange rates in either direction.
There are no major releases out of Canada for the remainder of the week so i expect today’s data release to be the main potential market mover for the GBP/CAD pair.
If you would like to learn more on how these factors could impact your GBP/CAD currency exchange, please do not hesitate to contact me using the form below. I’ll be happy to respond personally and discuss your requirements.