Pound Canadian Dollar (GBP/CAD) Exchange Rate Dips as Canadian Manufacturing PMI Picks Up
The Pound Sterling Canadian Dollar (GBP/CAD) exchange rate has dipped 0.25% today, taking the pairing to an inter-bank rate of CA$1.6565.
On Tuesday afternoon the Canadian manufacturing PMI picked up slightly from May’s 41-month low of 49.1, posting 49.2 in June.
This is the third consecutive month the index has fallen below the 50-mark, making this the longest period of decline since 2015/2016.
Added to this, IHS Markit revealed that manufacturing production fell at its fastest pace for three-and-a-half years.
However, this did little to weaken the ‘Loonie’ against Sterling.
Commenting on the data, Economics Associate Director at IHS Markit, Tim Moore said:
‘The latest survey results provide a clear sign that US-China trade frictions are holding back the Canadian manufacturing sector. New orders have now decreased for four months in a row, with survey respondents widely commenting on subdued export demand and weaker global trade volumes so far this year. Moreover, manufacturers indicated that their business optimism dropped sharply in June and was among the weakest seen since the start of 2016.’
Moody’s Warns a No-Deal Brexit Will Drive the UK into a Recession
Pound Sterling (GBP) exchange rates were largely on the back foot today as ratings agency Moody’s said that a no-deal Brexit could drive the UK into a recession.
Sterling continued to slump following its annual credit analysis report, as Moody’s warned against the UK leaving the European Union without a deal.
The agency stated:
‘Such an outcome [no-deal Brexit] would be very disruptive to current UK-EU trading arrangements and have a material, negative impact on the UK economy and on the economies of certain EU member states.’
Pound Sterling (GBP) Exchange Rates Struggle, UK Construction PMI Falls at the Fastest Rate in 10 Years
On Tuesday Sterling sentiment remained dampened following the release of disappointing UK construction data.
June’s UK construction PMI slumped to 43.1 from May’s 48.6, making this the steepest reduction in overall output since April 2009.
Added to this, new orders shrunk as client confidence was battered by political uncertainty.
Commenting on the data, Group Director at the Chartered Institute of Procurement and Supply Duncan Brock said:
‘This abrupt change in the sector’s ability to ride the highs and lows of political uncertainty shows the impact has finally taken its toll as new orders dried up ad larger contracts were delayed again. The pain of Brexit indecision was felt across all three sub-sectors but the previously resilient housing sector suffered the fastest drop in three years which is frankly worrying news.’
Pound to Canadian Dollar (GBP/CAD) Exchange Rate Outlook: Will a Disappointing UK Services PMI Weigh on GBP?
Looking ahead to Wednesday, the Pound (GBP) could fall against the Canadian Dollar (CAD) following the release of the UK services PMI.
If June’s services PMI slumps further than forecast, as this week’s other PMI data has, it could weigh on Sterling.
Meanwhile, if Canadian imports/exports data shows an increase in exports the report could push the Pound Canadian Dollar (GBP/CAD) exchange rate lower.