Pound Canadian Dollar (GBP/CAD) Exchange Rate Slides as Canadian Unemployment Dips to 5.7%
UPDATE: The Pound Sterling Canadian Dollar (GBP/CAD) exchange rate slipped this afternoon and the pairing is currently trading at an inter-bank rate of CA$1.7443.
Data released on Friday afternoon revealed that Canadian unemployment dipped to a better-than-expected 5.7% which has buoyed the ‘Loonie’.
Further data from Statistics Canada showed that the unemployment rate in Quebec fell to 4.9%, the lowest level since comparable employment data was first collected in 1976.
Meanwhile, the participation rate edged up from 65.7% to 65.9%, and the Canadian economy added 106,500 jobs, which likely buoyed the ‘Loonie’ as this was the largest monthly gain on record.
Pound Canadian Dollar (GBP/CAD) Exchange Rate Flat despite UK Manufacturing at 30-Year High
The Pound Sterling Canadian Dollar (GBP/CAD) exchange rate remains muted this morning and the pairing is currently trading at an inter-bank rate of CA$1.7513.
The Office for National Statistics (ONS) revealed that the UK economy picked up in the first three months of 2019, with preliminary GDP rising by 0.5% compared to growth of 0.2% in the final quarter of 2018.
Further data revealed that UK manufacturing growth rallied to a 30-year high of 2.2% in March.
However, Senior Economist, Tej Parikh, at the Institute of Directors warned that the growth may just be ‘a flash in the pan’, stating:
‘Some businesses brought activity forward early this year in preparation for leaving the EU, so higher stocks and earlier orders have artificially bumped up the growth numbers.
‘In the second quarter, many firms will be keen to run down their Brexit caches, which will drag on economic growth.’
Canadian Dollar (CAD) Muted as US Escalates Trade Tensions
On Friday the US President Donald Trump hiked tariffs to 25% on $200 billion worth of Chinese goods, escalating trade tensions between the US and China.
Responding to this, the Chinese Commerce Ministry stated that it ‘deeply regrets’ the US decision and would be taking ‘necessary countermeasures’.
The escalation comes in the middle of face-to-face discussions, however, President Trump has revealed that he received a ‘beautiful letter’ from his Chinese counterpart, Xi Jinping, on Thursday.
According to Mr Trump, the letter stated that China wanted to ‘work together’ with the US to see if they ‘can get something done.’
While reports of the letter eased tension slightly, the tariffs increasing from 10% to 25% likely weighed on the Canadian Dollar, leaving the pairing muted.
Pound Canadian Dollar Outlook: Will the GBP/CAD Exchange Rate Rise on a Hawkish BoC?
Looking ahead to the start of next week’s session, the Canadian Dollar (CAD) could rise against the Pound (GBP) following a speech from the Bank of Canada’s (BoC) Deputy Governor Timothy Lane.
If Mr Lane speaks about monetary policy during his speech, and his tone is hawkish, it could buoy the ‘Loonie’.
Meanwhile, on Tuesday morning the Pound could rise following the release of the UK average earnings data.
If UK earnings rise higher than forecast in March, the Pound Canadian Dollar (GBP/CAD) exchange rate could edge up.