Pound to Canadian Dollar Exchange Rate Avoids Losses in Anticipation of Upcoming News
While the Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate’s movement has been more modest since last week’s plummets, the pair has been able to avoid further losses and is firming today ahead of anticipated news in the coming sessions.
After opening last week at the interbank level of 1.65, GBP/CAD spent the week tumbling lower and lower before ending the week almost three cents lower, in the region of 1.62.
This morning, GBP/CAD even touched on its lowest level in over half a month, but the pair currently trends a little higher in the interbank region of 1.63 as it attempts to rebound again.
Investors have been buying Sterling (GBP) back from its cheapest levels in profit taking and anticipation for upcoming Brexit news, while investors are hesitant to buy the Canadian Dollar (CAD) ahead of upcoming Canadian growth data.
Pound (GBP) Exchange Rates Firming on Hopes for UK Government’s Brexit Plans
Investors bought the embattled Pound (GBP) back slightly yesterday, following plummets at the end of last week.
While Sterling failed to sustain gains against a resilient Canadian Dollar (CAD), the British currency is attempting to edge higher again today due to market anticipation for a potentially softer Brexit plan from the UK government.
Reports claim that the government will publicise more details on its plans for Brexit this week, less than a month before the current 31st of October Brexit date. This will reportedly contain a proposal for a solution to the contentious Irish backstop issue.
Investors are hesitant to sell the Pound on the off-chance that the news actually boosts the chances of a softer Brexit, though analysts doubt it will impress EU negotiators.
Sterling’s performance was also limited amid UK economic uncertainties, as the latest manufacturing PMI supported fears that Britain’s factory sector could be in recession.
Canadian Dollar (CAD) Exchange Rates Uneasy Ahead of Canadian Growth Report
The Canadian Dollar (CAD) has been more resilient against the Pound (GBP) than some other major currencies this week so far, but GBP/CAD advanced more easily today due to market uncertainties about Canadian growth.
Canada’s economic performance has been surprisingly resilient amid the global growth slowdown despite global recession fears, and the Bank of Canada (BoC) has continued to indicate that it sees no reason to cut Canadian interest rates.
However, if upcoming Canadian data disappoints investors, Canada’s economic outlook could worsen enough for BoC bets to become more dovish, leaving Canadian Dollar traders anxious.
Still, despite continued US-China trade tensions the trade-correlated Canadian Dollar avoided falling too far against Sterling due to recovery in oil prices. Oil is Canada’s most lucrative commodity and prices of it often influence CAD strength.
Pound to Canadian Dollar (GBP/CAD) Exchange Rate Investors Await Canadian Growth Report
Expectations for a resilient and neutral stance from the Bank of Canada (BoC) has been keeping the Canadian Dollar (CAD) sturdy in recent weeks, but that could change if upcoming Canadian data disappoints investors.
The most influential dataset for Pound to Canadian Dollar (GBP/CAD) exchange rate investors this week will be this afternoon’s Canadian Gross Domestic Product (GDP) growth rate report from July.
Canadian growth is expected to have slowed to just 0.1%, but if growth comes in even lower then BoC interest rate cut bets could rise and the Canadian Dollar could slump.
Markit’s Canadian manufacturing PMI report from September will also be published this afternoon and could further influence BoC bets if it surprises investors.
While this afternoon’s Canadian data is likely to be influential for GBP/CAD though, potential developments in Brexit and UK politics could also cause major movement.
Investors are anticipating details on the government’s Brexit plans. Unless the plans bolster the chances of a soft Brexit becoming reality though, the Pound to Canadian Dollar (GBP/CAD) exchange rate’s potential for gains may be limited.