The Pound to Canadian Dollar exchange rate has been gradually recovering since yesterday. Sterling has found a little extra support in today’s strong UK PMI data. Meanwhile, the trade-correlated Canadian Dollar is less appealing after US-China trade tensions bubbled up again today.
Last Week: Oil Prices and Bank of England Send GBP/CAD Plummeting
Last week’s Pound to Canadian Dollar exchange rate was much more volatile.
Prices of oil, Canada’s biggest export, saw impressive gains throughout the week. This, as well as hopes for fiscal policy to combat the coronavirus pandemic, supported the Canadian Dollar.
The ‘Loonie’ was able to more easily push the Pound lower later in the week, as Bank of England (BoE) news hit Sterling.
The Bank of England’s split on quantitative easing (QE) caused concerns that the bank was not willing to do whatever it took to combat the pandemic.
Three Things to Watch For This Week
- Coronavirus Developments
As Britain’s economy continues to gradually reopen, Pound investors will pay close attention to developments. Concerns of complications of rising infections could dampen the Pound’s appeal.
- Trade Developments
The Canadian Dollar is a currency correlated to risk and trade-sentiment. As a result, it will remain sensitive to developments in US-China trade tensions, as well as oil price markets.
- Growth Reports
A week from now, the latest UK and Canadian growth stats will be published. These stats could influence coronavirus speculation and impact movement in exchange rates.
Coronavirus developments will of course remain the biggest focus for GBP/CAD investors overall. However, GBP/CAD is likely to advance more easily if the global trade outlook weakens.