Pound Canadian Dollar (GBP/CAD) Exchange Rate Falls as UK Wage Growth Slows
UPDATE: The Pound Sterling Canadian Dollar (GBP/CAD) exchange rate continued to slide and the pairing is currently trading at an inter-bank rate of CA$1.7430.
Tuesday’s wage growth data revealed that growth has slowed in the UK which has put a squeeze on living standards.
Average earnings including bonuses rose by a lower-than-forecast 3.2% and excluding bonuses wages rose by 3.3%.
Commenting on pay growth, TUC General Secretary Frances O’Grady said:
‘Pay growth is stalling again. The last thing workers need is another hit in the pocket when real wages are still lower than a decade ago.
‘The government must raise the minimum wage to £10 as quickly as possible. And give unions the freedom to enter every workplace to negotiate fair pay rises.’
Pound Canadian Dollar (GBP/CAD) Exchange Rate Slips as UK Unemployment Dips to 3.8%
The Pound Sterling Canadian Dollar (GBP/CAD) exchange rate has slipped today and the pairing is currently trading at an inter-bank rate of C$1.7425.
On Tuesday, data revealed that UK unemployment edged down to a 44-year low of 3.8% in the three months leading to March.
Unemployment has not been lower since the three months leading to December 1974, however this could do little to buoy Sterling against the ‘Loonie’.
Unemployment for women hit a record low of 3.7%, and the amount of people in work stood at 76.1%, the joint highest since records began in 1971.
Sterling (GBP) Slips as Brexit Fuels Hiring Boost
Meanwhile, it has been suggested that Brexit pessimism has counterintuitively led firms to hire more staff rather than invest in new machinery.
Commenting on this, Investment Director for Personal Investing at Fidelity International, Tom Stevenson said:
‘The murky outlook is leading businesses to hire now with the option to fire later rather than make irreversible investments in new kit. Perhaps it is still too soon to get ahead of ourselves, though – a week before new inflation data, there’s a question mark over how real the earnings growth is.
‘Rising wages are bound in due course to feed through into wider price rises.’
Canadian Dollar (CAD) Rises as China Escalates Trade Tensions
On Monday China escalated trade tensions with the US despite calls from US President Donald Trump not to retaliate.
However, today the Canadian Dollar was able to rise against Sterling.
Shortly before the news that China had retaliated, the US President tweeted ‘China should not retaliate – will only get worse!’
China said it will increase tariffs on $60bn worth of US goods, starting from 1 June.
This came just three days after the US hiked tariffs to 25% on $200 billion worth of Chinese goods.
The President has also directed the US trade department ‘to begin the process of raising tariffs on essentially all remaining imports from China.’
However, on Monday Donald Trump revealed that he had not yet made a decision on whether or not to raise tariffs further.
Pound Canadian Dollar Outlook: Will Further US-China Tensions Weigh on CAD?
Looking ahead to Wednesday, the Canadian Dollar (CAD) could rise against the Pound (GBP) following the release of the Canadian Consumer Price Index (CPI) data.
If the CPI rises higher than forecast in April, it could give the ‘Loonie’ a boost.
Meanwhile, further reports of tensions between the US and China will likely dampen sentiment in the risk sensitive Canadian Dollar.
If it appears both sides are moving further away from a possible trade deal, the Pound Canadian Dollar (GBP/CAD) exchange rate could rise.