The Pound to Canadian Dollar exchange rate has been trending lower this week. Investors are selling the Pound back from highs in reaction to disappointing UK growth data. This means that GBP/CAD is falling even as the Canadian Dollar remains weak on US coronavirus fears and poor oil prices.
Last Week: UK Stimulus and Oil Prices Help GBP/CAD Surge
The Pound to Canadian Dollar exchange rate saw a surge in demand last week. Its advances were notable enough that despite today’s losses it still sustains around half of last week’s gains.
Investors bought the Pound in reaction to some UK fiscal stimulus announced by Chancellor Rishi Sunak. Hopes for Brexit developments also helped the Pound stay buoyed.
Sterling was able to capitalise on the Canadian Dollar’s weakness as well. As the number of US coronavirus cases surge and oil prices tumble on coronavirus fears, the risk and trade-correlated Canadian Dollar tumbled.
Three Things to Watch For This Week
- Bank of Canada (BoC) Policy Decision
The Bank of Canada (BoC) will hold its July policy decision tomorrow. The bank’s tone on issues like the current state of the pandemic, as well as how Canada is handling the crisis, will impact the Canadian Dollar’s appeal.
2. UK Job Market Report
The Pound outlook was worsened by today’s UK growth data. If job stats due Thursday are disappointing too, it could lead to even deeper Pound weakness.
3. Coronavirus Developments
The Canadian Dollar remains correlated to trade and global market sentiment. If the US coronavirus situation or oil prices continue to worsen, the Canadian Dollar will remain pressured.
The Pound is tumbling even against a weak Canadian Dollar. Unless upcoming UK data is particularly impressive or the Brexit outlook improves though, investors will have little reason to buy the Pound against almost any major rival.