The Pound Canadian Dollar exchange rate has started off on a positive note this week thanks to a forecast-beating UK Services PMI result. Elsewhere, the Government has embarked on a lengthy appeal to the Supreme Court over Article 50.
The Canadian Dollar is still moving in response to commodity prices today following last week’s historic OPEC news, which saw the interbank GBP CAD exchange rate fluctuate between 1.68 and 1.69.
Pound CAD Rises despite Government Appeal
The Pound was able to advance modestly on the Canadian Dollar on Monday, although the Pound’s performance has been extremely mixed overall.
GBP was lent some measure of support as November’s services PMI, covering the tourism sector and other areas, moved further above the crucial 50 mark separating growth from contraction. The overall composite PMI also increased on the month.
Elsewhere in the UK, the government has been making its appeal to the Supreme Court, declaring that a Parliamentary vote is not needed before triggering Article 50.
Should the government ultimately win the case, a ‘Hard Brexit’ may be on the cards, which could send the Pound tumbling.
Canadian Dollar Slips before BOC Decision
Although last week’s closing Canadian news was broadly positive, CAD has been in limited demand at the start of the week.
At the close of last week the latest jobs figures showed that November’s unemployment rate dropped from 7% to 6.8%. Meanwhile, oil prices were bolstered by the OPEC oil production cut decision. While the price of oil continues to rise this week, gains from the unemployment news have since been eroded.
GBP/CAD Exchange Rate Forecast
This week, Pound Sterling/Canadian Dollar exchange rate movement may occur as a result of Canadian trade balance stats and the Bank of Canada (BOC) interest rate decision.
On the UK front, key news will include Wednesday’s production stats and Friday’s trade balance results. While the government appeal is expected to end on Thursday, the actual verdict isn’t due until January 2017.
The UK industrial and manufacturing production figures are largely set to rise, but GBP CAD movement is more likely to occur in response to the tone adopted by the BOC in its latest interest rate decision. Any hints at rates being cut in the near future would weigh on the ‘Loonie’.