GBP/CAD Exchange Rate Accelerates Amid Slide in Oil Prices
UPDATE: The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate struck higher on Wednesday, with the pairing climbing to CA$1.6950 as the oil-sensitive ‘Loonie’ was undermined by a slump in crude prices.
Brent crude fell over 2% to $60 a barrel today, with oil being driven sharply lower by weakening global demand and a surprising upswing in US crude stockpiles.
Meanwhile, aiding the Pound’s accent was the launch of Boris Johnson’s leadership campaign as the frontrunner to replace Theresa May said he is ‘not aiming for a no-deal Brexit’.
GBP/CAD Exchange Rate Upbeat Following UK Employment Report
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate firmed this morning as markets welcomed the UK’s latest employment figures.
At the time of writing the GBP/CAD exchange rate is edging higher this morning, with the pairing striking CA$1.6872 as it moves away from the five-month low struck at the start of the week.
Pound Sterling (GBP) Exchange Rates Stabilise as UK Wage Growth Beats Expectations
The Pound (GBP) is holding its ground against the Canadian Dollar (CAD) and the majority of its other peers this morning, following the release of the UK’s latest employment report.
According to data published by the Office for National Statistics (ONS), the UK’s unemployment rate held at a 44-year low of 3.8% in April after employment rose by 32,000 to a new record high.
However it was the accompanying wage growth figures that were the main focus for GBP investors this morning, with Sterling able to stabilise following yesterday’s losses as wage growth (excluding bonuses) ticked up from 3.3% to 3.4, beating forecasts it would slide to 3.1%.
Total pay (including bonuses) was a little more subdued however only rising 3.1% in April, sliding from an upwardly revised 3.3% due to the highest bonuses being awarded in February and March following a similar pattern to previous years.
Canadian Dollar (CAD) Steady as Trump Suspends Mexico Tariffs
At the same time, the Canadian Dollar (CAD) remains steady this morning as the ‘Loonie’ clings to gains made at the start of the week after the US suspended plans to impose tariffs on Mexico.
CAD investors welcomed the news amid concerns that the tariffs could complicate the USMCA trade agreement which replaced NAFTA last year.
However CAD exchange rates pulled back from a multi-month high overnight on Monday as Trump stoked global trade tensions once more as he threatened to impose tariffs on the remainder of Chinese exports if Chinese President doesn’t meet with him at the G20 summit at the end of June.
GBP/CAD Exchange Rate Forecast: Will UK Political Uncertainty Continue to Pressure Sterling?
Looking ahead, we expect the Pound Canadian Dollar (GBP/CAD) exchange rate to face some headwinds over the coming weeks as the first round of the Conservative leadership contest gets underway.
Currently there are 10 candidates in the running to replace Theresa May as PM and leader of the Tories, with a series of secret ballots by MPs over the next couple of weeks whittling this down to just two, who will then go head-to-head.
This process however is expected to lead to heightened political uncertainty in the UK, something which will likely drag on Sterling sentiment, especially if the leading candidates seek to take a hardline approach on Brexit.
Meanwhile, in the absence of any notable domestic data, movement in the Canadian Dollar is likely to be driven by external factors this week, with escalating global trade tensions and a potential fall in oil prices likely to soften the appeal of the ‘Loonie’.