GBP/CAD Exchange Rate Falls as UK Approaches ‘Critical Point’ in Pandemic
The Pound to Canadian Dollar (GBP/CAD) exchange rate dipped by -0.1% today, with the pairing currently trading around CA$1.70.
Sterling suffered today after Professor Chris Whitty, a key scientific advisor to Downing Street, said that Covid-19 could flourish over the winter months.
The Government’s Chief Scientific Advisor, Sir Patrick Vallance, said
‘If this continues along the path, the number of deaths directly from Covid could rise on an exponential curve, and you can move from small numbers to really very large numbers.’
Meanwhile, Whitty warned:
‘The trend in UK is heading in the wrong direction and we are at a critical point in the pandemic.’
‘We are looking at the data to see how to manage the spread of the virus ahead of a very challenging winter period.’
Consequently, recent news over surging Covid-19 infections in Britain has caused growing concern for the nation’s economic situation.
Canadian Dollar (CAD) Edges Higher Despite Growing Concerns for the Commodity-Linked Currency as Covid-19 Cases Grow
The Canadian Dollar (CAD) has suffered from increasing risk-aversion today, as world economies remain cautious as the number of coronavirus infections rise.
With Canada a major producer of commodities – particularly oil – ‘Loonie’ investors are becoming increasingly jittery.
In Canadian economic news, today saw the release of the latest New Housing Price Index, which beat forecasts and rose by 0.5% in August.
TD Bank Economist Brian De Pratto said that the Canadian economy continues to ‘defy gravity’, adding:
‘While the lack of spring market has been an important factor behind the unseasonably strong summer, as of August, the level of sales activity is now in line with historic norms, suggesting that much of this pent-up demand has been satisfied.’
GBP/CAD Forecast: Could a Downbeat Bank of England Drag Down Sterling?
Canadian Dollar (CAD) investors will be looking ahead to Wednesday. Canadian Prime Minister, Justin Trudeau, is scheduled to unveil his plan to help the nation recover from the Covid-19 pandemic.
Meanwhile, ‘Loonie’ investors will be keeping a close eye on global economic developments. Any indications that Covid-19 cases are increasing rapidly would prove CAD-negative.
Pound (GBP) investors will be looking ahead to tomorrow’s speech from Andrew Bailey, the Bank of England’s (BoE) Governor. If he is notably dovish about the British economy, then we would see Sterling suffer.
Tomorrow will also see the release of the UK CBI Industrial Trends Survey for September. If this confirms consensus and falls by -41%, the GBP/CAD exchange rate will fall.