Pound Sterling Canadian Dollar (GBP/CAD) Exchange Rate Flat as Canadian GDP Rises 1.3%
UPDATE: The Pound Sterling Canadian Dollar (GBP/CAD) exchange rate remained flat after today’s Canadian growth data. The pairing is currently trading at around CA$1.7144.
Official data revealed that the Canadian economy expanded at an annualised rate of 1.3% between July and September this year.
The ‘Loonie’ remained under pressure as today’s data came in below the revised forecast from the Bank of Canada (BoC). However, the data was higher than the 1.2% rise predicted by analysts.
Meanwhile, business investment grew 2.6% in Q3, which is the fastest pace since the final quarter of 2017.
Added to this, household spending jumped 0.4% while housing investment rallied by 3.2%, the largest gain since Q1 2012.
Pound Sterling Canadian Dollar (GBP/CAD) Exchange Rate Muted as Brexit Pessimism Weighs on Confidence
The Pound Sterling Canadian Dollar (GBP/CAD) exchange rate remained muted, trading at around CA$1.7142.
Sterling remained flat as data revealed that UK consumer confidence was stuck at a six-year low in November.
GfK revealed that its consumer confidence measure remained at its joint-lowest level since 2013, thanks to Brexit and election uncertainty.
Consumer confidence remained at -14, and in line with other indicators paints a subdued picture of the UK economy.
Commenting on today’s data, GfK’s client strategy director, Joe Staton said:
‘In the face of Brexit and election uncertainty, consumers are clearly in a ‘wait-and-see’ mode.
‘Uncertainty is nobody’s friend. So, while many issues are under the spotlight in this election, political parties will need to satisfy voters that they will be effective for the wider economy and that, as a consequence, people will be better off next year and beyond. Consumers need to be convinced they will be able to balance their personal accounts beyond ‘just about managing’. Fantasy economics alone will not guarantee votes.’
Mixed Oil Prices Leave Canadian Dollar (CAD) Flat
On Friday, oil prices were mixed thanks to quiet trade and the US Thanksgiving holiday.
The oil-sensitive ‘Loonie’ was left under pressure as next week’s meeting between OPEC and allies is high on the list of things to watch for investors.
It has been agreed that in order to support prices, output is to be cut by 1.2 million barrels a day through to March. Some expect this to be extended as US oil production keeps hitting records.
In a note, Fitch Solutions wrote:
‘It is highly probable that the group will rollover the deal in its current form until at least the end of 2020, but we see limited scope for a new round of cuts, in light of uneven compliance and diminishing returns.’
Added to this, risk appetite remained under pressure after China warned the US on Thursday it would take ‘firm countermeasures’ in response to US support for Hong Kong protestors.
While China has not been explicit, investors are concerned that any such move would mean further delay to the ‘phase one’ trade deal. A deal would end the US-China trade war which has limited global growth and the consumption of oil.
YouGov: PM to Gain a Comfortable Majority
Sterling fell back from yesterday’s highs sparked by YouGov’s poll predicting Conservative leader, Boris Johnson would secure a comfortable majority in next month’s election.
According to pollsters that accurately predicted the results of the 2017 election, Johnson is on course to gain a majority of 68 after 12th December election.
Meanwhile, on Thursday data from Statistics Canada showed average weekly earnings of non-farm payroll employees rose by 4% annually in September.
This likely provided the ‘Loonie’ with an upswing of support, although did little to offset decreased investor appetite from heightened US-China trade tensions.
Pound Canadian Dollar Outlook: Will Weak UK Manufacturing Weigh on GBP?
Looking ahead to this afternoon, the Canadian Dollar (CAD) could edge lower against the Pound (GBP) following the release of Canada’s GDP data.
If the Canadian GDP growth rate slumps further than expected between August and September, weighing on Q3 growth, the ‘Loonie’ will slide.
Meanwhile, on Monday the pairing could retreat following the release of the UK’s manufacturing PMI.
If data shows the manufacturing sector was pushed further into contraction by Brexit and election uncertainty in November, the Pound Canadian Dollar (GBP/CAD) exchange rate is likely to fall.