GBP/CAD Exchange Rate Rangebound, UK Industrial Sector Struggles
The Pound Canadian Dollar (GBP/CAD) exchange rate held steady today, with the pairing currently trading around CA$1.742 after the UK GDP figure for October fell below forecasts and stagnated at 0%.
Debapratim De, UK Economist at Deloitte, commented:
‘Today’s data suggest that the UK economy is struggling to gain momentum after avoiding a recession in the third quarter.
‘The sharp contraction in construction activity is a reminder that the global slowdown and Brexit uncertainties continue to blight UK growth.’
Today also saw the UK Industrial Production figure for October come in at a weaker-than-expected 0.1%.
Despite today’s weak British economic data, the GBP/CAD exchange rate has remained relatively unmoved with political developments remaining in focus ahead of the 12th December general election.
Sterling investors will be awaiting the updated YouGov MRP poll later on this evening, with any signs of the Labour Party narrowing their gap with the Conservatives ahead of Thursday’s election likely weakening the Pound on heightened political uncertainty.
CAD/GBP Exchange Rate Rangebound as ‘Loonie’s Gains Are Clipped by US-China Trade Uncertainty
The Canadian Dollar (CAD) struggled against Sterling today following yesterday’s weaker-than-expected Canadian building permits figures for October, which unexpectedly fell to -1.5%.
Yesterday’s poor Canadian construction data has prevented the ‘Loonie’ from edging higher against the Pound today as concerns rise over Canada’s economic health amid a slowing global economy.
Canadian Dollar investors are also remaining cautious ahead of the 15th December, which will see whether or not Washington goes ahead with a new round of tariffs on Chinese exports.
Clete Willems, a partner at the law firm Akin Gump, was sceptical, however, saying:
‘I’m not betting on tariffs… Another round of tariffs would likely yield the unreliable entities list from China, further political hardening, and all but end the chances of a deal before the election. I don’t think either side wants that.’
There are no Canadian economic data releases due out today, with ‘Loonie’ traders instead focusing on global economic developments.
Bipan Rai, Head of Strategy at CIBC Capital Markets, commented:
‘When it comes to broad risk this week it’s all about the December 15 tariffs and if they go into place next Sunday.’
GBP/CAD Outlook: UK General Election in Spotlight
UK political developments will continue to drive the GBP/CAD exchange rate this week ahead of Thursday’s general election.
Any signs of the Labour Party narrowing their gap in the opinion polls with the Tories would weaken Sterling on heightened fears of a hung parliament.
Canadian Dollar traders will be looking ahead to Thursday’s speech by Stephen S. Poloz, the Governor of the Bank of Canada (BoC), with any dovish comments about the health of Canada’s economy likely weakening the ‘Loonie’.