Canadian Dollar Soars as BOC Raises Interest Rates

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GBP/USD 1 Week Chart

The Pound (GBP) rallied further against some of its peers this morning following comments by Bank of England (BoE) policymaker Ian McCafferty in which he called for an early end to the bank’s stimulus programme.

This extended Sterling’s gains from yesterday as the Pound was lifted by the UK’s latest employment data as the UK jobless rate fell from 4.6% to 4.5% in May.

Investors were also impressed by the accompanying earnings data. While still weak, wage growth (excluding bonuses) did accelerate a little last month.


After striking its worse levels since November yesterday morning, the Pound Euro (GBP EUR) exchange rate rebounded later in the trading session as the UK released its upbeat employment figures.

The single currency was also pressured yesterday by remarks from European Central Bank (ECB) policymaker Ignazio Visco who said that the bank’s quantitative easing programme would need to remain ‘expansive’ despite the Eurozone’s impressive growth in the first half of the year.

Meanwhile, the Euro was able to slow the Pound’s advance this morning thanks to the release of Germany’s latest inflation figures, with the inflation rate rising from 1.5% to 1.6% last month.

US Dollar

Sterling also mounted a recovery against the US Dollar (USD) on Wednesday as investors were impressed by the UK’s latest unemployment figures.

The ‘Greenback’ meanwhile came under fire following Federal Reserve Chair Janet Yellen’s testimony in front of Congress, with markets left disappointed that Yellen’s tone was not as hawkish as some had anticipated.

Yellen’s testimony will continue later today, and may still have an impact on the US Dollar as she is expected to elaborate on some of her comments made yesterday.

Canadian Dollar

The Pound Canadian Dollar (GBP CAD) exchange rate plummeted over two cents on Wednesday following the Bank of Canada’s (BoC) vote to raise interest rates yesterday afternoon.

This is the first time the bank has hiked rates in seven-years, with the BoC saying the decision was driven by recent economic data which helped to bolster the bank’s confidence in upcoming growth.

Australian Dollar

Sterling found its attempts to rally against the Australian Dollar (AUD) short lived overnight on Wednesday as the ‘Aussie’ was bolstered by China’s latest trade data, which showed that imports in Australia’s largest trading partner beat expectations last month.

New Zealand Dollar

The Pound New Zealand Dollar (NZD) exchange rate was also hit by the Chinese trade figures last night, however Sterling was able to claw bank some of its losses by the start of the European trading session following the hawkish comments by the BoE’s McCafferty.


Further Reading


Coronavirus spread fears linger – USD strong – AUD at 11 year lows

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Posted to: News

Please note that the opinions of our authors are their own and do not reflect the opinion of Best Exchange Rates and should not be taken as a reference to buy or sell any financial product.

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