Pound Canadian Dollar (GBP/CAD) Exchange Rate Dips as BRC Annual Sales see Slowest Rise on Record
The Pound Sterling Canadian Dollar (GBP/CAD) exchange rate dipped 0.25% this morning, taking the pairing to an inter-bank rate of CA$1.6374.
The Pound slumped across the board on Tuesday as data from the British Retail Consortium (BRC) showed that annual sales rose at the slowest average pace on record.
The survey revealed that over the past year Brexit pessimism has weighed on consumers, leading to the disappointing results.
Average sales growth edged down to 0.6% in the 12 months to June, making this the slowest increase since records began in 1995.
Meanwhile, like-for-like sales slumped by a lower-than-forecast -1.6% which further dampened sentiment in Sterling.
Commenting on the data, BRC Chief Executive, Helen Dickinson said:
‘Overall, the picture is bleak: rising real wages have failed to translate into higher spending as ongoing Brexit uncertainty led consumers to put off non-essential purchases.
‘The continued risk of a no-deal Brexit is harming consumer confidence and forcing retailers to spend hundreds of millions of pounds putting in place mitigations.’
Canadian Dollar (CAD) Flat as US-China Negotiating Environment ‘Even More Severe’
Meanwhile, the United States and China are set to relaunch trade talks this week.
However, a year after trade tensions were ignited, it appears there is little sign of change since the US-China deal fell apart in May – bad news for trade-correlated currencies like the Canadian Dollar.
Reuters have reported that sources suggest the G20 summit last month did little to clear the path for negotiators to resolve the impasse that caused the breakdown of talks.
An anonymous Chinese official stated that the talks would resume very quickly, however there was a ‘fairly large gap’ in the core demands of each side.
The source said it would be a challenge to reach an agreement on the toughest issues, and ‘The negotiating environment is even more severe.’
Oil Prices Slip as Investors Fret as US-China Trade Tensions Could Continue into Second Year
On Tuesday, oil prices eased despite the rising risk of conflicts in the Middle East. Declining oil prices limited the Canadian Dollar’s (CAD) potential for gains.
Commenting on this, Managing Partner at Vanguard Markets said:
‘The weaker global economic outlook is keeping oil prices under downward pressure, but tensions in the Middle East are enhancing awareness to possible supply risk and should keep a floor under oil in the medium term.’
Pound Canadian Dollar Exchange Rate Outlook: Will CAD Slide on a Dovish BoC?
Looking ahead to Wednesday, the Pound (GBP) could rise against the Canadian Dollar (CAD) following the release of the UK GDP data.
If the UK economy expanded by more than expected in May, it could provide Sterling with an upswing of support.
Meanwhile, it is likely the ‘Loonie’ will remain under pressure ahead of Wednesday’s Bank of Canada (BoC) interest rate decision.
The bank is expected to leave rates unchanged, but it’s tone will be closely attended to.