The Pound to Canadian Dollar (GBP/CAD) exchange rate moved slightly higher in the early hours of Friday’s European trading ahead of the highly influential Canadian inflation numbers.
This afternoon, Canada will release its January Consumer Price Index (CPI) which is expected to fall from 1.9% to 1.5% on the year.
Meanwhile, the UK hasn’t had a great week in terms of economic data. On Wednesday, the UK’s unemployment rate rose from four-decade lows, from 4.3% to 4.4% and wages failed to keep up with consumer prices (at 3.0%), coming in at 2.5% in the three months through December on the year.
On Thursday, things got worse when the UK Gross Domestic Product (GDP) reading slipped from previous 1.5% estimates to 1.4% in the fourth quarter on the year. This rate of growth is the slowest in five years.
The Office for National Statistics (ONS) said:
‘A number of very small revisions to mining, energy generation, and services were enough to see a slight downward revision to quarterly growth overall. Services continued to drive growth at the end of 2017, but with a number of consumer-facing industries slowing, as prices led to household budgets being squeezed.’
Thursday also saw the release of Canadian Retail Sales numbers; December saw a -0.8% contraction take place, a surprise given that economists had forecast the reading to come in flat at 0.0%. 2017 was Canada’s strongest year for retail sales in two decades, adding to the surprise of the contraction. Strong retail sales numbers had previously spurred hopes of higher Canadian interest rates.
Industry expert Fred Demers commented:
‘Don’t expect the totally data-dependant Bank of Canada [BoC] to change its dovish language anything soon, as it will take a solid dose of positive data surprised to make [BOC Governor Stephen] Poloz decidedly hawkish again.’
The Pound to Canadian Dollar (GBP/CAD) exchange rate is trending in the region of 1,7774, approximately 0.21% higher.