GBP/CAD Exchange Rate Rangebound, UK Coronavirus ‘Serious and Imminent Threat’
The Pound Canadian Dollar (GBP/CAD) exchange rate held steady this morning, with the pairing currently trading around CA$1.715 after concerns for the British economy have risen after the number of coronavirus cases in the UK has doubled from 4 to 8.
Health Secretary Matt Hancock commented:
‘The incidence or transmission of novel coronavirus constitutes a serious and imminent threat to public health’.
Now that the Government has been given an extra warning to step up preventative measures against the virus, some Pound traders are feeling jittery that this could have a negative effect on the British economy in the near-term.
Due to no UK economic data releases today, the GBP/CAD exchange rate has been trading steadily, with markets turning their attention to global developments instead.
Any further signs that the coronavirus could spread, however, would weigh on market appetite for the Pound as Britain’s economic future looks increasingly uncertain after its official exit from the European Union.
CAD/GBP Exchange Rate Steady, Market Risk Appetite Slides
The Canadian Dollar (CAD) has continued to hold out on limited risk-appetite today as the global economy looks increasingly uncertain amid the coronavirus outbreak.
Also, one of Canada’s key commodities, oil, has also faced a drop as investors flee risk-sensitive currencies like the ‘Loonie’ for safe-havens like the US Dollar instead.
Mohamed Arkab, Algeria’s Oil Minister, commented:
‘The coronavirus epidemic has a negative impact on economic activities, especially on the transport, tourism and industry, in China particularly, and also increasingly in the Asian region and gradually in the world’.
In Canadian economic news, today will see the release of January’s Canadian Housing Starts report, which is expected to rise from 197.3 thousand to 210 thousand.
As a result, we could see the CAD/GBP exchange rate edge higher as Canada’s housing sector shows signs of improvement early into 2020.
GBP/CAD Outlook: Could ‘Loonie’ Sink as Market Risk Appetite Slides?
Pound (GBP) investors will be awaiting tomorrow’s release of the preliminary Gross Domestic Product report for the fourth quarter, which is expected to flatline at 0% against the previous quarter’s 0.4%.
As the UK economy continues to show signs of slowing down, we could see the GBP/CAD exchange rate begin to dip on rising uncertainty over the British economy this year.
Tomorrow will also see the publication of January’s UK BRC Like-for-Like Retail Sales report, which is expected to sink from 1.7% to -1%.
The GBP/CAD exchange rate will continue to be driven by developments around China’s coronavirus outbreak, with any further indications that this could negatively impact the global economy weakening the risk-averse Canadian Dollar.