UK wage data boosts the pound
After a brief fall in the GBP/CAD exchange rates at the beginning of the week, sterling has continued to strengthen this week. Initially, Tuesday’s poor UK inflation data coupled with ongoing uncertainty in Europe caused the pound to fall from around CAD$1.92 to just above $1.90.
But yesterday’s figures showed that UK unemployment is down and that wages are continuing to grow at a rate above that of inflation. This news caused the pound to strengthen against the Canadian dollar, reversing any losses from the previous day. However there was strong data from Canada, in the form of wholesale sales figures, which slowed sterling’s advance.
Today there has been little data of note, but this hasn’t stopped the pound marching on and gaining a further point and a half against the Canadian dollar. Industrial orders from the UK were well above expectations, but it’s the unfolding events in Greece that are the main cause of volatility, as investors try to predict the outcome of the ongoing negotiations between Greece and the EU. The GBP/CAD exchange rates are now sitting around CAD$1.9350.
There may be the opportunity for the Canadian dollar to claw back some of its losses later today, as the Bank of Canada’s Deputy Governor, Agathe Cote, is due to speak at a conference in Quebec. This speech will be keenly analysed for hints or clues about future changes to monetary policy and/or interest rate decisions. The Bank of Canada recently reduced its interest rates from 1% to 0.75% – this being one of the main reasons GBP/CAD exchange rates broke into the CAD$1.90s .
We also see the release of crude oil inventories from the US. Although this is not Canadian data, it could have a significant impact on the Canadian dollar due to the country’s enormous energy sector.
If you need to buy or sell Canadian dollars and want the best exchange rates, contact me today on the details below. Here at Foremost Currency, we can offer exchange rates up to 5% better than high street banks.
Through the use of specific types of contract, we can also help you lock in a rate of exchange up to two years into the future. This allows you to budget effectively within the timescale of your transaction and means you won’t get caught out if rates move against you.
+44 (0)1442 892060