Pound Canadian Dollar (GBP/CAD) Exchange Rate Slides as Risk Appetite Increases
The Pound Canadian Dollar (GBP/CAD) exchange rate continued to slide over the morning as an increased risk appetite saw investors favour the ‘Loonie’.
The pairing is currently trading at an inter-bank rate of CA$1.7061.
Global risk sentiment softened following the news that Republicans and Democrats have reached an agreement over US border security, potentially avoiding a further government shutdown.
Meanwhile, US President Donald Trump suggested that he was keen to meet his Chinese counterpart, Xi Jinping, in the next month, which sparked hope that the US and China could make significant advances in trade discussions.
In the UK, despite PM Theresa May sparking hopes today that there could be a breakthrough in Brussels over the Brexit impasse, the GBP/CAD pairing continued to slide.
Yesterday: Pound (GBP) Plummets as British Economy Slows to Six-Year Low
Yesterday saw the Pound Canadian Dollar (GBP/CAD) exchange rate fall over the course of the day following disappointing UK data releases.
Data showed that the UK had suffered its slowest rate of growth in six years, with the economy only expanding by 1.4% in 2018.
Moreover, the UK manufacturing sector slid into a technical recession, and business investment fell for the fourth consecutive quarter for the first time since the financial crash, further dampening appeal for the Pound.
Nevertheless, Chancellor Philip Hammond emphasised the economy was still growing, stating:
‘It’s a solid performance from the economy when you look at what’s happening globally and in other competitor countries.
‘But of course there is no doubt that our economy is being overshadowed by the uncertainty created by the Brexit process and the sooner we can resolve that the better and the quicker we can get back to more robust growth in the future.
‘I am very confident that over the next few weeks we will be in a position to move forward and remove this uncertainty and allow people to get on with their lives.’
Yesterday: Canadian Dollar (CAD) Rallies despite Heightened Risk of Global Slowdown
The Pound Canadian Dollar (GBP/CAD) exchange rate slipped over the course of Monday due to the weakness in the Pound.
While the ‘Loonie’ (CAD) made significant gains, the currency was dented by increased global risk sentiment and a fall in oil prices.
There are fears that the US and China will fail to strike a trade deal before 1 March deadline with reports suggesting that the pair had not yet put together a draft agreement.
With anxieties of a slowdown in the global economy, the commodity-sensitive Canadian Dollar suffered.
GBP/CAD Outlook: Will a Dovish Carney see Sterling Fall Further?
The Pound Canadian Dollar (GBP/CAD) exchange rate could slip further this afternoon following the Governor of the Bank of England (BoE), Mark Carney’s speech.
If Carney’s tone is dovish, it could see the Pound (GBP) slip further.
Brexit anxieties are also likely to weigh heavy on the Pound as the Prime Minister is due to update the House of Commons on her Brexit negotiations in Brussels, with any significant progress likely to buoy Sterling.
As there is a lack of Canadian economic data releases, the risk-sensitive ‘Loonie’ (CAD) may see movement as discussions between the US and China continue in Beijing.
If there are further signs that the two will reach an agreement before the March deadline, the Pound Canadian Dollar (GBP/CAD) exchange rate is likely to slip.