BoE policymaker increases the value of the pound
Following a hint of interest rate increases by Bank of England (BoE) policymaker Catherine Mann, the Pound Sterling (GBP) was able to hold its value versus the Canadian Dollar (CAD). The GBP/CAD exchange rate was around $1.6200 at the time of writing, essentially unchanged from prior levels.
Mann’s Pessimistic Comments Increase GBP
The anticipation of a dovish slant from the BoE following their latest interest rate decision were confounded by Mann’s words. The Sterling, which was under pressure owing to the economic crisis, received a new lease of life after the policymaker stated that it was more probable than not that the central bank will raise interest rates rather than decrease them. The BoE’s commitment to “stay the course” until the work is finished and Mann’s statement that inflation remained over the target level of 2% both contributed to the GBP’s increase.
Brexit Misstep Stops GBP’s Uptrend
But the Pound also suffered from Mann’s caution that Brexit had hurt the economy and shocked commerce and investment. Brexit uncertainty, which continues to weigh on the GBP, was exacerbated by the policymaker’s opinions on trade obstacles post-Brexit and the effects of undertightening.
Strong PMI data boosts the Canadian dollar.
However, the Canadian Dollar made some tiny gains following the publication of positive Ivey PMI data. The most recent economic activity numbers significantly outperformed previous month’s reading and came in at 60.1, which is the highest rating since August 2022. Despite this, the WTI oil market’s turbulent characteristics continued to limit the CAD’s advances.
Influence of Retail Sales on GBP/CAD Exchange Rates
When the British Retail Consortium (BRC) retail sales monitor is published, the exchange rate between the British Pound and the Canadian Dollar may alter further. It may be the weakest pace of growth since October if the data comes in as predicted. The publication of the December Balance of Trade figures, meantime, may cause changes in the CAD.