Pound Canadian Dollar (GBP/CAD) Exchange Rate Mixed Regardless of Renewed BoE Intervention
The Pound Canadian Dollar (GBP/CAD) exchange rate is wavering this morning after the Bank of England (BoE) announced further intervention measures.
At the time of writing, the GBP/CAD exchange rate was trading at roughly CA$1.5214, showing minimal change from the morning’s opening rates.
Pound (GBP) Mixed amid Further BoE Intervention
Recovering from overnight lows, the Pound (GBP) initially rallied this morning, as the Bank of England announced further efforts to protect UK pension funds.
The BoE has increased their daily limit on auctioning long-dated government bonds, in a move designed to continue easing the gilt markets following on from the fiscal chaos left in the wake of Chancellor Kwasi Kwarteng’s mini-budget.
‘In line with the Bank’s financial stability objective and in order to avoid dysfunction in core funding markets, the purpose of these operations is to enable liability driven investment (LDI) funds to address risks to their resilience from volatility in the long-dated gilt market.’
However, the gilt yields continue to rise, inching up to 4.45% from Friday night’s 4.38%. It remains to be seen how the markets will react to the further intervention.
However, the Pound has since given back most of its gains amid a souring market mood.
Data is scarce for GBP today, with any further market changes beholden to domestic events.
Canadian Dollar (CAD) Buoyed despite Falling Oil Prices
The Canadian Dollar (CAD) is enjoying gains across the board this morning, despite today’s drop in oil prices.
This is likely due to Chinese manufacturing returning to work following a golden week holiday, which has increased global demand for oil, leading to a strong showing for the oil-linked ‘Loonie’.
Furthermore, last week saw the release of better-than-forecast employment data, which came in at 21,100, higher than the predicted increase of 20,000.
CAD exchange rates are also buoyed amid the anticipation the Bank of Canada (BoC) to hike interest rates by another 50bps later this month as the BoC continues to tackle inflation.
Pound Canadian Dollar Exchange Rate Forecast: Upbeat UK Employment Figures to Buoy Sterling?
Looking ahead, the release of the UK’s latest jobs figures could help to buoy the Pound Canadian Dollar (GBP/CAD) exchange rate on Tuesday.
August’s jobs figures are expected to report that UK unemployment held at a near 50-year low.
The accompanying earnings release is also forecast to show wage growth climbed from 5.5% to 5.9% over the same period.
While the uptick in average earnings will be welcomed by GBP investors, the continued gulf between wages and inflation could cap the Pound’s upside potential.
For CAD, data for the rest of the week is incredibly sparse, so the commodity-linked ‘Loonie’ may be affected by further changes in oil prices and demand as the week continues.