Pound Canadian Dollar (GBP/CAD) Exchange Rate Fluctuates on
The Pound Canadian Dollar (GBP/CAD) exchange rate is zigzagging today as expectations of a 75bps rate hike from BoE are met with mounting recession fears.
At time of writing, the GBP/CAD exchange rate is around CA$1.5167, a 0.15% fall from this morning’s opening levels.
Pound (GBP) Listless as Cost-of-Living Crisis Fears Linger
The Pound (GBP) is failing to find a clear direction today as the Bank of England (BoE) was due to release their interest rate decision but with the nation in mourning, the decision has been pushed back to next week. Bolstered expectations of a 75bps rate hike could be providing a modest tailwind today.
After a softer-than-expected inflation reading yesterday, Sterling managed to hold firm against its major rivals. It came as a moderate relief to households amid a cost-of-living crisis, but with core inflation edging higher, the UK is not out of the woods just yet. The BoE maintains its goal of reining in inflation down to the target level of 2%. Investors are confident of the central bank continuing its monetary policy going forward.
Meanwhile, the quarterly survey from the BoE and Ipsos showed public inflation expectations at a record high for 2023. Confidence in the central bank dipped as the UK public become more concerned with the cost-of-living crisis.
Canadian Dollar (CAD) Fluctuates Along with Turbulent Oil Prices
The Canadian Dollar (CAD) wavers as concerns over waning fuel demand and further concerning news out of China.
The Energy Information Administration (EIA) released data showing that crude inventories in the United States offset concerns of supply disruption. The unexpected build-up of crude inventories is keeping a lid on oil prices. Combined with wavering global market sentiment in parts due to China’s faltering economy, is also keeping a firm lid on gains for the ‘Loonie’. Clifford Bennett, Chief Economist at ACY Securities, said:
‘The oil price has been pricing in a global recession, but even with flat global growth, the oil demand would remain quite strong relative to continued supply worries.’
Meanwhile, further weighing on the Canadian Dollar was the third consecutive decline in manufacturing sales. A 0.9% fall that was in line with expectations but highlighted a slowdown in the sector.
Lending some moderate support to the commodity-linked ‘Loonie’ is some positive news out of China. The State Council announced that the People’s Bank of China (PBoC) will be providing 200 billion yuan (£24.8bn) to commercial banks as special lending funds to encourage company loans.
Pound Dollar Exchange Rate Forecast: UK Retail Sales to Sink the Pound?
Looking ahead, with data thin on the ground for the day, attention will shift to retail sales for the UK tomorrow. An expected 0.5% drop MoM for August would highlight the living cost squeeze on households.
Elsewhere, any further development in China could weigh on the Canadian Dollar as the world’s second largest economy struggles in reviving the stalling economy.