Latest Sterling to Canadian Dollar movements and forecasts

Sterling benefits from Euro weakness

At the end of last week we saw Sterling gain ground on the Canadian Dollar. This was partly due to poor Canada data failing to hit the forecasts and predictions but a lot of the rate movement was actually to do with events elsewhere. It was at the end of last week Mr Draghi announced not only had they put in place a negative deposit rates (This essentially charges the banks for holding funds, encouraging them to lend more to small businesses etc. and in turn kick start the economy). but he also reduced the interest rate from 0.25% to 0.15%.

This caused investors and speculators to pull there money out of the Euro and into other assets and higher yielding currencies such as Sterling. Commodities based economies will have also benefitted but this tends to be put into Gold rather then Canada’s main export of Oil. This gave the Pound and caused the rates of exchange to rise, making it cheaper to buy the Loonie.

What will move the Sterling to Canadian Dollar exchange rates this week?

The week starts fairly quietly on Monday with only some minor Canadian housing data. It shows the annualized amount of new residential buildings that started construction in the previous month. This showed an improvement of 13k against the predictions bit actually only rose by 1K on the previous month. This was enough to send the GBP/CAD exchange rates tumbling half a point downwards.

Looking at the rest of the week, the news is likely to be sterling dominated as the only really influential data from Canada isn’t until Friday. This is when we will see the latest Canadian manufacturing sales. Other than a speech from BoC governor Poloz on Thursday, Canadian data is thin on the ground this week.

Sterling in contrast has a very busy week ahead, with many pieces of data being released that could move the exchange rates dramatically. The most important of which will be mid week, when we will see Manufacturing and Industrial production figures out Tuesday and Cliament Count and Unemployment figures out on Wednesday.

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