Currency News: GBP Slides While CAD Rises
Currency News:
In today’s currency news, the GBP is declining against its peers as data on output showed U.K factories and construction companies doing worse than expected in May. This added to a range of recent reports also suggesting that the country is experiencing an economic slowdown.
Data released earlier showed U.K. house prices grew at their slowest pace in four years. PMI data also showed a similar negative trend, raising doubts on the ability of the Bank of England (BOE) to finally tighten monetary policy. Markets are now closely waiting for BOE Governor speech which will be held next Tuesday and will hopefully clarify whether BOE’s intervention will be postponed to 2018.
The Canadian dollar rose on Friday to almost a 10-month high vs its U.S. counterpart, after domestic jobs data beat expectations and increased the chances of an interest rate hike by the Bank of Canada (BOC) as soon as next week.
Canada’s economy added 45,300 jobs in June, topping the 10,000 forecast. Expectations of a rate increase have been rising since BOC officials said in June that 2015 interest rate cuts had succeeded in shielding the economy from falling oil prices. Data from the overnight index swaps market showed that chances of a hike at next week’s meeting increased to 93 percent from 86 percent before the report. The market has by now fully priced in a hike by next September and implied an 80 percent chance of a second increase by December.