Widespread concern about the state of UK travel and transport leading up to Christmas has left the Pound Canadian Dollar exchange rate under pressure.
Despite rising oil prices, Canadian Dollar interest has been limited overall, potentially due to concerns about how Trump will impact Canadian businesses.
Last week, the Pound fluctuated wildly against the Canadian Dollar, but ultimately made an improvement from Monday to Friday from 1.65 to 1.66.
Limited GBP CAD Interest Stems from Strike Action, Trade Concerns
On the homefront, strike action at British Airways, the Post Office and Southern Rail has threatened to cause chaos over the last week before Christmas, with passengers and parcels remaining in danger of not getting to their destinations on time before the four-day holiday.
With little sign of a resolution to these issues in sight, interest in the Pound has accordingly dipped.
Further damage to Sterling has been dealt by recent remarks about future UK-EU trade. While Trade Secretary Liam Fox has voiced support for the UK remaining partly in the single market after leaving, Sir Andrew Cahn said that the UK is unlikely to be able to ‘cherry-pick’ trade conditions.
Canadian Dollar Demand Limited on Trump ‘Collision Course’
While the Canadian Dollar has advanced strongly against the Pound, the currency has been struggling overall on account of forecasts for the Canadian economy after Donald Trump becomes US President.
Fears have primarily focused on the more competitive US business environment drawing Canadian companies south across the border. Additionally, concerns have been raised that Canadian businesses will have to forego their green credentials and focus on profit over the environment in order to regain a competitive edge against the US.
In commodities news, both gold and crude oil prices have risen, lending support to CAD.
GBP/CAD Exchange Rate Forecast
This week the Pound is expected to fall against the Canadian Dollar if negative forecasts for incoming UK data prove accurate.
Tuesday is set to bring falling Confederation of British Industry (CBI) distributive trades for December, while Wednesday is set to show an expansion of Government borrowing in November.
Friday’s gloomy close to the week is set to show the final Q3 growth rate results fall on the quarter but rise on the year.
From Canada, major ecostats will include Thursday’s inflation rate and retail sales results, as well as Friday’s GDP figure for October.
Inflation is set to rise on the month in November, while retail sales are expected to drop slightly on the month and the year.
For the GDP stats, a slight downward shift from 0.3% to 0.1% has been predicted.