GBP/CAD Exchange Rate Edges Higher as Canadian Economy Susceptible to Slowing Global Economy
The Pound Canadian Dollar (GBP/CAD) exchange rate rose today and is currently trading around $1.7589.
The Canadian Dollar (CAD) fell against the Pound (GBP) today, and was not helped by a report from the International Monetary Fund (IMF) stating that the annual growth forecast for the global economy had fallen to 1.5% – far lower than the previous forecast.
The IMF’s report reads:
‘This is a delicate year for the global economy. If … any of the major risks materialize, then the expected recoveries in stressed economies, export-dependent economies, and highly indebted economies may not occur.’
Canada’s economy is particularly reliant on exports, and with signs of a slowing global economy this has weighed on market confidence in the ‘Loonie’.
Today saw the release of the Canadian New Housing Price Index for February, which came in at a disappointing 0.0%.
Sterling, meanwhile, has gained on the Canadian Dollar following last night’s granting by the EU of a six-month extension to the Brexit process.
GBP/CAD Exchange Rate Rises as Brexit Uncertainty Lingers
Today saw the publication of the UK RICS Housing Price Balance figures for March, which plummeted to -24%, weakening confidence in Sterling.
Simon Rubinsohn, Chief Economist at RICS, sounded a gloomy note, saying:
‘Brexit remains a major drag on activity in the market with anecdotal evidence pointing to potential buyers being reluctant to commit in the face of the heightened sense of uncertainty.’
Brexit developments have occupied markets today, and as Prime Minister Theresa May must once again prepare to face Parliament with another attempt at passing her Brexit deal, this has left many Sterling traders feeling cautious.
Leading Brexiteer Jacob Rees-Mogg, was scathing of May’s position, saying:
‘I thought the prime minister said a few weeks ago that she wouldn’t agree to any extension and now we are getting quite a long one. I don’t think it’s a good idea and it is not delivering on the referendum result.’
GBP/CAD Forecast: Sterling Could Rise on Brexit Deal Hopes
Canadian Dollar traders will be looking ahead to a speech by Timothy Lane, the Deputy Governor of the Bank of Canada, tomorrow.
Any indications from Mr Lane that the Canadian economy is slowing could see the CAD/GBP exchange rate sink further.
The GBP/CAD exchange rate, however, will be directed by on-going Brexit developments, as May now faces the challenge of passing her withdrawal agreement through a chaotic Parliament.
There are no significant UK economic data releases until next week, although any signs of a consensus emerging out of cross-party talks between the Conservatives and the Labour party could potentially see the Pound rise on renewed Brexit deal hopes.