GBP/CAD Exchange Rate Static as UK Factory Activity Slows
UPDATE: The Pound Sterling Canadian Dollar (GBP/CAD) exchange rate continues to trade narrowly this afternoon as an underwhelming UK manufacturing PMI failed to prompt a reaction from markets ahead of an expected rate hike from the Bank of England on Thursday.
With the slight dip in manufacturing growth unlikely to alter tomorrow’s rate decision, GBP investors appeared willing to largely overlook the PMI figures.
Meanwhile the oil-correlated Canadian Dollar (CAD) is also struggling in trade today following a sharp downturn in crude prices, with Brent crude falling as much as 2% though the session.
GBP/CAD Exchange Rate Cedes Ground as Canadian GDP Jumps
UPDATE: After initially climbing at the start of the European session, the Pound Sterling Canadian Dollar (GBP/CAD) exchange rate has retreated this afternoon following the publication of Canada’s latest GDP stats.
The GBP/CAD pairing is now trading flatly as Statistics Canada reported that Canada’s economy expanded by a healthy 0.5% in May, up from 0.1% the previous month and beating forecasts for a more modest rise of 0.4%.
— Statistics Canada (@StatCan_eng) July 31, 2018
Meanwhile GBP investors remain preoccupied by the upcoming Bank of England policy meeting, leaving the Pound in a holding pattern today.
GBP/CAD Exchange Rate Weakened by Soaring Oil Prices
The Pound Sterling Canadian Dollar (GBP/CAD) exchange rate opened last week’s session on a strong footing, with the pairing strengthening on Tuesday following the announcement that Theresa May would be taking personal control of Brexit negotiations.
Markets were hopeful the PM’s involvement would help expedite talks as well as allow her to pursue her plans for a ‘softer’ Brexit.
However the Pound (GBP) failed to hold onto these gains in the second half of the week as a lull in notable data releases left it exposed to a rise in the crude-correlated Canadian Dollar (CAD) following a sharp rise in oil prices.
The ‘Loonie’ was also lent strength from the positive trade talks between the EU and US, with CAD investors hopeful that this may bode well for NAFTA trade talks as well.
Cementing the Pound’s losses at the tail end of the week was the EU’s chief negotiator Michel Barnier’s rejection of May’s Brexit customs proposals, something which would indicate a considerable setback for negotiations.
Canadian Dollar (CAD) Exchange Rate Slumps on NAFTA Rejection Reports
The Canadian Dollar (CAD) fell sharply against the Pound (GBP) and the majority of its over peers overnight on Monday as the Canadian media reported on rumours surrounding NAFTA renegotiations.
These reports suggested that Canada’s Foreign Affairs Minister, Chrystia Freeland, has been barred from taking part in high-level NAFTA talks taking place between the US and Mexico later this week.
This drove the CAD exchange rate lower as it added to speculation that the US may be seeking to split talks with Mexico and Canada.
Pound Sterling (GBP) Exchange Rates Holds Steady Ahead of BoE Rate Move
Meanwhile the Pound (GBP) continues to hold steady today as an absence of domestic data leaves markets to remain focused on the Bank of England’s (BoE) upcoming rate decision.
The BoE is scheduled to conclude its latest policy meeting on Thursday, with economists widely forecasting that it will result in the bank voting to raise interest rates in August.
This will only be the second hike from the bank in over a decade so is definitely lending some significant strength to Sterling at the start of the week.
Markets will need to be wary of a possible drop in the GBP/CAD exchange rate in the wake of the meeting however, with a number of analysts forecasting a ‘dovish hike’ from the bank.
GBP/CAD Exchange Rate Forecast: Will Rise in GDP Bolster the Canadian Dollar?
While the focus this week will undoubtedly be on the Bank of England’s rate decision on Thursday, there are a couple of data releases in the meantime that could prompt some movement in the Pound Sterling Canadian Dollar (GBP/CAD) exchange rate, starting with Canada’s latest GDP figures later today.
Economists are forecasting that Canada’s economy will have expanded at a healthy clip in May, with growth expected to have risen from 0.1% to 0.4%, likely strengthening the Canadian Dollar (CAD).
Meanwhile the Pound (GBP) looks poised to slide on Wednesday following the publication of the UK’s latest Manufacturing PMI, with analysts predicting July’s figures will show a slight slowdown in factory activity.