Pound to Canadian Dollar Exchange Rate Unappealing amid Brexit Uncertainties
The Pound to Canadian Dollar (GBP/CAD) exchange rate fell back from its monthly best this morning as investors awaited key Canadian data, but the pair still remains higher on the week due to the Canadian Dollar’s (CAD) weakness.
Following last week’s climb from the interbank level of 1.58 to 1.61, GBP/CAD may be in for another week of gains.
GBP/CAD trends just above the week’s opening levels today, but overnight the pair briefly touched a high of 1.62. This was the best level for GBP/CAD all month.
With Brexit fears continuing to weigh on Sterling, Pound to Canadian Dollar exchange rate investors are awaiting upcoming Canadian data and potential central bank news.
Pound (GBP) Exchange Rates Unappealing amid Lack of Hopes for Brexit Developments
Investors have had little reason to buy the Pound (GBP) this week, keeping the currency from continuing the rally seen last week.
Tensions between the UK and EU have worsened, as UK Prime Minister Boris Johnson continues to request renegotiation to the Brexit deal to remove the controversial Irish backstop plan.
The EU has repeatedly rebuffed these requests though, maintaining that the backstop is central to any potential withdrawal agreement. As a result, no-deal Brexit fears have returned to focus and these weigh on Sterling.
The Pound saw no additional support from today’s UK public borrowing data, which fell short of expectations.
Canadian Dollar (CAD) Exchange Rates Firm Ahead of Canadian Inflation Report
Due to global trade uncertainties and speculation of a more dovish Bank of Canada (BoC), the Canadian Dollar’s (CAD) weak streak has continued in recent sessions.
The Canadian Dollar is a trade-correlated currency, so lasting US-China trade fears are dampening demand for the currency. This prevented CAD from benefitting from yesterday’s Canadian manufacturing report, which was not as deep a contraction as forecast.
Prices of oil, Canada’s most lucrative commodity, have also been poor in the past week and this has put additional pressure on the oil-correlated Canadian Dollar.
Canadian Dollar movement has steadied today, as investors anticipate key Canadian inflation rate data due for publication this afternoon.
Pound to Canadian Dollar (GBP/CAD) Exchange Rate Investors Await Canadian Data
Unless there are some surprising Brexit developments between UK Prime Minister Boris Johnson and EU officials in the coming sessions, no-deal Brexit fears may keep pressure on the Pound in the coming sessions.
This would leave the Pound to Canadian Dollar (GBP/CAD) exchange rate to be influenced more by the Canadian Dollar (CAD), which could be driven by Canadian data and central bank speculation for the remainder of the week.
Canada’s key July inflation rate report will be published this afternoon. Inflation is expected to have slowed year-on-year, but if it comes in even lower than expected it could cause Bank of Canada (BoC) interest rate cut speculation to rise.
BoC interest rate cut speculation may see further fuel depending on what central bank news comes out from this week’s Central Bank Symposium in Jackson Hole.
The Pound to Canadian Dollar (GBP/CAD) exchange rate could also be influenced by Friday’s Canadian retail sales stats from June.