The Pound to Canadian Dollar (GBP/CAD) exchange rate edged slightly higher on Monday as softer Canadian inflation weighed on the ‘Loonie’, although gains for Sterling were capped as investors awaited more policy detail from Prime Minister Andy Burnham.
At the time of writing, GBP/CAD was trading at CA$1.8875, up around 0.1% on the day.
Pound to Canadian Dollar (GBP/CAD): 1.886772 (+0.02%)
Euro to Canadian Dollar (EUR/CAD): 1.604233 (+0.04%)
Dollar to Canadian Dollar (USD/CAD): 1.40557 (+0.25%)
DAILY RECAP:
The Pound (GBP) struggled to find momentum on Monday as markets reacted cautiously to Andy Burnham’s first address after taking office as Prime Minister.
Although Burnham outlined the government’s wider priorities, he offered few specific policy details. He said further announcements on measures to address the cost of living, including how these plans would be financed, would follow on Tuesday.
With investors left waiting for more tangible information, Sterling remained largely rangebound during the session.
A lack of significant UK economic data also meant the Pound had little in the way of domestic catalysts to drive movement.
Meanwhile, the Canadian Dollar (CAD) showed some resilience despite softer-than-forecast inflation figures and falling oil prices.
Canada’s latest consumer price index showed headline inflation cooling from 3.2% in May to 2.8% in June, while core inflation unexpectedly eased from 2.2% to 2.1%.
This put some pressure on the Canadian Dollar, although CAD avoided steeper losses.
A slight decline in oil prices also failed to notably dent the currency, with the crude-linked ‘Loonie’ appearing to draw some support from the fact that oil prices remain elevated following their recent rally.
Near-Term GBP/CAD Forecast: UK Jobs Data in the Spotlight
Looking forward, attention shifts to the UK’s latest employment data on Tuesday.
Forecasts suggest unemployment may have risen slightly from 4.9% to 5.0% in the three months to May. However, a predicted rise in employment could help limit downside pressure on the Pound.
Sterling markets will also be focused on the latest wage growth figures. Continued strength in earnings could provide support for the Pound and help it weather any weaker labour market signals.
Meanwhile, the Canadian Dollar may be driven by oil price dynamics. If crude prices continue to climb amid escalating tensions in the Middle East, the commodity-linked ‘Loonie’ could gain ground.
