Pound to Canadian Dollar Exchange Rate Sees Modest Rebound after Days of Falls
Investors bought the Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate back up slightly from its worst levels this morning, despite a lack of fresh demand for Sterling (GBP) and the broad appeal of the Canadian Dollar (CAD).
While GBP/CAD has rebounded slightly from last night’s lows, the worst levels since October 2017, the pair remains well below the week’s opening levels.
GBP/CAD opened this week at the interbank level of 1.66, and despite edging away from its worst levels the pair is still trending almost two cents lower.
GBP/CAD is on track to see yet another week of losses following a heavily bearish May and June, as the Canadian Dollar remains one of the market’s most appealing major currencies while the Pound is throttled by dominating Brexit fears.
Investors are unlikely to have much reason to buy the Pound to Canadian Dollar exchange rate much higher either, due to a lack of solid support for Sterling.
Pound (GBP) Exchange Rates Floundering after Days of Poor Data and Brexit Fears
While the Pound (GBP) rebounded slightly from its lows against the Canadian Dollar (CAD) today, this was more due to the Canadian Dollar being sold from its best levels in profit taking than any notable support for the Pound.
Instead, Sterling has remained broadly unappealing, as concerns about the possibility of a no-deal Brexit dominate Britain’s economic and political outlooks.
Both contenders to be Britain’s next Prime Minister had indicated that they may embrace a no-deal Brexit rather than delay the process again.
Uncertainty over how Brexit will unfold has been among the primary causes of weak UK data, with this week’s June PMIs from Markit coming in well below expectations.
The Pound was pushed even lower yesterday, as Britain’s June services PMI printed near stagnation and revealed that Britain’s economy likely contracted last month.
Canadian Dollar (CAD) Exchange Rates Sold from Best Levels after Wednesday Jump
The Canadian Dollar (CAD) outlook continues to find fresh support this week, and today’s Canadian Dollar losses have more to do with the currency being sold from its best levels in profit taking than any notable weakness in the currency.
Instead, the Canadian Dollar has been one of the market’s most appealing major currency in recent weeks. This week has seen the currency supported further by fresh domestic and global developments.
Canada’s June manufacturing PMI data and May trade balance data both beat expectations, with the trade balance particularly impressing investors as it unexpectedly entered a surplus of C$0.76b.
On top of this, the Canadian Dollar found support in global trade sentiment. The trade-correlated currency benefitted from stronger prices of oil, Canada’s most lucrative commodity.
These factors have kept the Canadian Dollar generally appealing this week despite the currency being sold slightly from its best levels today.
Pound to Canadian Dollar (GBP/CAD) Exchange Rate Investors Await Canadian Job Report
The Pound to Canadian Dollar (GBP/CAD) exchange rate is edging higher this week, but its potential for gains largely depends on weakness in the Canadian Dollar (CAD).
The Pound (GBP) remains highly pressured by no-deal Brexit fears dominating political and economic outlooks, leaving investors focused on potential political developments as the Conservative Party leadership contest continues.
With a lack of particularly influential UK data out before the end of the week, GBP/CAD investors are likely to turn their attention towards Friday’s anticipated Canadian job market data.
Canada’s June job market report will be published during Friday’s American session, and could be one of this week’s influential ecostats for the Canadian Dollar.
Canadian employment is expected to have slowed in June, with the unemployment rate expected to have worsened slightly to 5.5%.
With the Canadian Dollar appealing on the back of strong Canadian data and Bank of Canada (BoC) interest rate hike bets lately, if the job market data disappoints investors it could deepen the Canadian Dollar’s recoil from its best levels.
This, as well as any new concerns in global trade tensions, could help the Pound to Canadian Dollar (GBP/CAD) to make a stronger recovery from its lows.