Pound Canadian Dollar Exchange Rate Falls as Investors Brace for BoE Bailey Speech
The Pound Canadian Dollar (GBP/CAD) exchange rate is on the back foot this morning as GBP investors remain wary ahead of a speech by Bank of England (BoE) Governor Andrew Bailey.
At time of writing, GBP/CAD dropped to a low of $ 1.6429, relatively unchanged from this morning’s opening levels.
Pound (GBP) Subdued ahead of Bailey Comments
The Pound (GBP) is subdued this morning despite posting a modest recovery after last week’s disappointing retail sales figures.
Sterling is stumbling as GBP investors are reluctant to make any aggressive bets ahead of the planned speech today by Bank of England Governor Andrew Bailey.
The BoE’s Bailey’s due to make a speech titled ‘Macroeconomic and Financial Stability in Changing Times’ at noon.
GBP investors are hoping for a more aggressive approach to future rate hikes, and a much-needed rally for the Pound. However, if the BoE maintains its dovish outlook in light of the uncertainty posed by the war in Ukraine, it could serve to weaken GBP exchange rates further.
Canadian Dollar (CAD) Retains Upside Despite Fall in Oil Prices
The Canadian Dollar (CAD) saw an upswing following the release of strong manufacturing sales data at the end of last week, with a jump to 3.7% from January’s figure of 0.6%. The published figures beat out forecasts and appear to continue to lend the ‘Loonie’ support at the start of this week somewhat limiting the impact of a softer crude prices on the oil-sensitive currency.
The drop in oil prices comes amid concern over new Covid lockdowns in China and the potential impact this could have on global demand.
Elsewhere the ‘Loonie’ may be buoyed by the European Union’s proposed oil ban on the import of Russian oil. Claims from Canadian officials that the country is willing and able to meet energy demands but remains to be seen if such a task can be achieved in time.
Hopes of an Iran deal to help alleviate the pressure on global energy markets could be linked to the declining WTI crude price.
Pound Canadian Dollar Forecast: Could a Hawkish turn by BoE Spur the Pound?
With Bailey spearheading the BoE speech today, investors are hoping the governor provides further guidance for the central bank’s next move in May.
The last three monetary policy meetings have seen the BoE increase interest rates by 25bpb each time, with a potential fourth on the way. If Bailey and the Bank of England strike a more hawkish tone then the Pound could see a much-needed boost.
With no major Canadian data out today, the focus will be on any further development in the Ukraine-Russia conflict to impact the commodity-linked Canadian Dollar.