Surprise Canadian GDP Growth Trims GBP/CAD Exchange Rate Gains
UPDATE 15:40 BST: The Pound (GBP) has continued to appreciate against the Canadian Dollar (CAD) today, although Pound Sterling’s earlier gains have been reduced by recent CA news.
Canadian GDP figures for April have shown 0.1% growth during the month, beating recently-changed forecasts for no growth at 0%.
This is hardly a high level of economic activity, but the result has still increased CAD demand to a small degree.
Another factor reducing GBP/CAD gains today has been European Council President Donald Tusk’s warning on Brexit.
Like a number of EU leaders, Mr Tusk has taken issue with the apparent slow pace of Brexit progress this year:
“There is a great deal of work ahead and the most difficult tasks are still unresolved.
“This is the last call to lay the cards on the table.”
Higher-than-Expected UK GDP Print Triggers GBP/CAD Exchange Rate Rally
The Pound (GBP) has advanced by 0.5% against the Canadian Dollar (CAD) today, rising thanks to some supportive UK GDP figures.
The finalised quarterly reading for Q1 2018 has printed at 0.2%, just beating the Office for National Statistics estimate of 0.1%.
While there is a very narrow margin between the two figures, the fact that this wasn’t the worst possible outcome has been latched onto by GBP traders.
Putting the data into a positive context, Capital Economics Senior UK Economist Ruth Gregory said:
‘Overall … we remain cautiously upbeat about the economy’s near-term prospects and continue to think that the Bank of England’s Monetary Policy Committee will press ahead and raise interest rates at its next meeting on 2nd August.’
Canadian Dollar to Pound (CAD/GBP) Exchange Rate Slides despite Strong Case for BOC Interest Rate Hike
The Canadian Dollar (CAD) has lost ground to Pound Sterling (GBP) and other currency peers today, despite rising optimism about a Bank of Canada (BOC) interest rate hike in July.
Instead, CAD losses have been caused by oil production issues, with some producers unable to capitalise on a recent rise in crude prices due to pipeline problems.
Additionally, there are background concerns that more Federal Reserve interest rate hikes in the US could push the US Dollar up and reduce Canadian Dollar demand.
Pound Sterling to Canadian Dollar (GBP/CAD) Exchange Rate Forecast: Is Volatility ahead on Canadian GDP Data?
The Pound (GBP) may be able to extend its lead against the Canadian Dollar (CAD) before the weekend, when Canada’s GDP data is released.
Levels of Canadian GDP growth are predicted to have slowed during April, with a downturn from 0.3% to 0.1% on the cards.
Such a slowdown could further concern CAD traders today, enabling a greater GBP/CAD exchange rate advance.
Will GBP/CAD Exchange Rate Become Turbulent on UK PMI Stats?
Beyond this week’s data releases, there may be GBP/CAD exchange rate fluctuation when next week’s UK PMIs come out over Monday to Wednesday.
The Pound could decline on the initial readings, as manufacturing and construction sector activity is tipped to decline on Monday and Tuesday.
Wednesday’s services sector PMI could spark a GBP/CAD exchange rate rally if there are prior Pound Sterling losses, however; an improvement from 54 points to 54.2 is expected.