The GBP/CAD currency pair hovered above a fresh 2-week low of 1.8514 on Wednesday, as the Canadian Dollar drew support from rising oil prices. Canada is the largest crude exporter to the United States.
West Texas Intermediate (WTI) crude oil rose for a third straight session on Wednesday after Kazakhstan halted production at the Tengiz and Korolev oilfields due to power issues.
At the same time, a hotter-than-expected UK inflation reading curbed expectations of further interest rate cuts by the Bank of England.
The UK Office for National Statistics reported that headline CPI had risen 3.4% year-on-year in December. That figure exceeded both November’s 3.2% YoY increase and the 3.3% consensus.
Core CPI, which excludes food and energy, rose 3.2% year-on-year in December, while matching the prior reading and the consensus.
And, services inflation picked up to 4.5% in December from 4.4% in November.
In its December Monetary Policy Summary, the BoE said the scale of any additional rate reductions would depend on how the inflation outlook develops.
While officials still saw room for more rate cuts over time, they warned that subsequent decisions on easing were becoming a “closer call.”
The GBP/CAD currency pair was last down 0.39% on the day to trade at 1.8516.
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