Pound to Canadian Dollar Exchange Rate Recovers Losses as Coronavirus Fears Hit Growth
Despite lingering Brexit concerns and strength in recent Canadian data, the Pound Sterling to Canadian Dollar (GBP/CAD) has been able to sustain most of its recent gains. Persisting Pound (GBP) strength has made it easier for the pair to avoid losses.
Last week saw GBP/CAD open at the interbank level of 1.71 and surge. GBP/CAD ultimately closed the week high in the region of 1.72.
This week’s movement has already been mixed. After a brief dip back into the region of 1.71 earlier, GBP/CAD is trending closer to the week’s opening levels again at the time of writing.
The Pound continues to find support in UK economic outlook hopes. However, the Canadian Dollar is being weighed by the latest global trade uncertainties. Investors are eagerly anticipating key data due in the coming days.
Pound (GBP) Exchange Rates Find Support on UK Budget Hopes
Investors piled into the Pound (GBP) last week, as investors reacted to news of a new UK Finance Minister. There were hopes that Rishi Sunak would offer a more expansionary budget, with higher government spending to boost an economic rebound.
The Pound was able to hold most of those gains. Optimism around the upcoming budget rose again today, as Sunak announced that the budget would go ahead on the 11th of March after all.
Cracking on with preparations for my first Budget on March 11. It will deliver on the promises we made to the British people – levelling up and unleashing the country’s potential. pic.twitter.com/5msCVfJWN8
— Rishi Sunak (@RishiSunak) February 18, 2020
Due to optimism around the budget, Pound investors were able to overlook some disappointing UK wage growth data from earlier in the session.
Lasting concerns over UK-EU Brexit tensions were also overshadowed by focus on the budget. Overall Sterling is seeing resilience as investors continue to anticipate a rebound in Britain’s economic activity this year.
Canadian Dollar (CAD) Exchange Rates Tumble as Coronavirus Outbreak Hits Global Trade
The Canadian Dollar (CAD) is a currency often correlated to global trade developments. As a result, it has been hit hard by fresh concerns that the coronavirus outbreak is causing damage to global economic growth.
Tech company Apple has warned it would not hit financial targets due to the coronavirus outbreak. This worsened global concerns about the impact the disease will have on economic activity.
Apple set its growth targets just last month, so to already concede they would not be hit due to the virus has meant the virus may have a bigger impact than markets expected.
On top of this, prices of oil, Canada’s most lucrative commodity, have also been falling amid the latest coronavirus concerns. This has put further pressure on the Canadian Dollar today.
Pound to Canadian Dollar (GBP/CAD) Exchange Rate Awaits Key Data in the Coming Sessions
Fresh coronavirus concerns are keeping the Canadian Dollar (CAD) under pressure. However, Canada’s economic outlook is fairly decent. If upcoming Canadian data beats expectations it could further boost the economic outlook.
GBP/CAD investors are awaiting key data due in the remainder of the week.
UK and Canadian inflation rate data from January will be published tomorrow. UK retail sales and Canadian housing data will come in on Thursday.
Then finally, Friday’s session will see key UK PMI projections for this month and Canada’s December retail sales results.
If upcoming UK data makes investors more confident in a domestic economic rebound, the Pound (GBP) could be in for further strength.
Overall the Pound to Canadian Dollar (GBP/CAD) exchange rate will be driven by economic data, as well as any surprising coronavirus developments in the coming days.