Pound Canadian Dollar (GBP/CAD) Exchange Rate Edges Lower as Canadian Economy Unexpectedly Sheds Jobs
UPDATE: The Pound Sterling Canadian Dollar (GBP/CAD) exchange rate edged lower on Friday afternoon, and the pairing is currently trading at an inter-bank rate of CA$1.7456.
Statistics Canada revealed that Canadian unemployment held steady at 5.8% in March.
However, the Canadian economy unexpectedly shed 7,200 jobs in March, the first decline in seven months.
Despite March’s fall in employment, data showed that in Q1 2019, Canadian employment rose by 116,000 jobs, likely buoying the ‘Loonie’.
Commenting on this, Nathan Janzen, Senior Economist at Royal Bank of Canada said:
‘We got a little dip in employment, but the numbers are volatile and it’s been on a pretty strong run over the prior half year.’
Pound Canadian Dollar (GBP/CAD) Exchange Rate Muted as PM Requests Brexit Delay
The Pound Sterling Canadian Dollar (GBP/CAD) exchange rate is not doing much today so far, with the pairing currently trading at an inter-bank rate of CA$1.7485.
On Friday morning, Prime Minister Theresa May wrote to the European Union to request an extension of the Brexit process to 30 June.
May has also proposed that if MPs are able to agree upon a deal in time, the UK should be able to leave before European Parliamentary Elections on 23 May.
However, if the House of Commons still remains in Brexit deadlock and is unable to reach an agreement, the UK would prepare candidates for those elections.
Meanwhile, an anonymous senior EU source stated that European Commission President Donald Tusk is proposing to offer the UK a 12-month ‘flexible’ Brexit delay.
This likely sparked some mild Brexit optimism, however Sterling remained muted.
Canadian Dollar (CAD) Muted as Purchasing Activity Rebounds
Data released on Thursday revealed that Canada’s purchasing activity in March showed a faster rate of expansion, with activity rebounding from February’s five-month low.
The seasonally adjusted Ivey Purchasing Managers Index (PMI) rose from 50.6 to 54.3.
However, this could do little to offset Brexit optimism.
Trump: US-China Trade Agreement to be Announced in Four Weeks
Despite the increase in risk-appetite following reports the US and China were close to reaching a trade agreement, the Canadian Dollar (CAD) remained flat against the Pound (GBP).
Before his meeting with the Chinese Vice President, US President Donald Trump said that while some difficult points had been agreed upon, there were still some points that needed further discussion.
However, Trump revealed that the US and China are so close that an agreement could be announced within four weeks.
Speaking in the Oval Office, President Trump said:
‘We’re getting very close to making a deal. That doesn’t mean a deal is made, because it’s not, but we’re certainly getting a lot closer.
‘And I would think with, oh, within the next four weeks or maybe less, maybe more, whatever it takes, something very monumental could be announced.’
Pound Canadian Dollar Forecast: Will GBP/CAD Exchange Rate Rise as Lords Vote in Favour of Brexit Bill?
This afternoon, the Canadian Dollar (CAD) could slip against the Pound (GBP) following the release of Canadian employment data.
If March’s net change in employment rises by 1,000 after the previous month’s gains of 55,900, sentiment in the ‘Loonie’ could be dampened.
Looking ahead to Monday, the House of Lords is expected to vote on Labour MP Yvette Cooper’s Brexit Bill that ensures a no-deal cannot happen without the consent of Parliament.
If the Lords vote in favour of the Bill, the Pound Canadian Dollar (GBP/CAD) exchange rate is likely to rise.