The Pound to Canadian Dollar exchange rate was rangebound today as coronavirus lockdown restrictions in the UK appear to be working.
At the time of writing the pair is currently trading at around CA$1.7575.
Pound (GBP) Supported by Falling Coronavirus Cases
In lieu of any notable data releases from the UK, the Pound has been supported by the Covid-19 vaccine rollout out and falling infections.
The UK is on course to vaccinate 15 million of the most vulnerable groups in society against the virus by the February 15th deadline set out by the government.
Today saw daily UK Covid-19 cases fall by almost 4,500 compared to last month.
As a result of falling cases, investors become increasingly hopeful that the UK economy will be able to open up sooner rather than later.
Prime Minister, Boris Johnson will lead a press conference this evening at Downing Street, which investors will keep an eye on for any indication that restrictions may be eased sooner than expected.
Boris Johnson has today told MP’s that booster vaccinations will be needed in autumn of 2021, saying:
‘We’re going to have to get used to vaccinating and then revaccinating in the autumn as we come to face these new variants.’
Canadian Dollar (CAD) Boosted by Rising Oil Prices
The Canadian Dollar was supported by rising oil prices today, Brent climbed to $60 a barrel, which are pre-pandemic prices.
However, Canada’s rollout of coronavirus vaccinations have been slow compared to other countries, thus limiting any gains for CAD.
Despite this, the Bank of Canada (BoC) expects a 4% growth this year, though the bank made it clear in their January meeting that they will hold the current policy of easing as it is until the inflation target is achieved.
The BoC said:
‘CPI inflation has risen to the low end of the Bank’s 1-3 percent target range in recent months, while measures of core inflation are still below 2 percent. CPI inflation is forecast to rise temporarily to around 2 percent in the first half of the year.’
Pound to Canadian Dollar Outlook: UK GDP Data in Focus
Pound traders will be awaiting Bank of England’s (BoE) Governor Andrew Bailey’s speech later this evening.
Any hawkish comments regarding the outlook for Britain’s economy would boost Sterling.
Pound investors will also wait for the UK’s GDP Q4 data release which is expected to show a growth in the last quarter of 2020 despite numerous coronavirus restrictions.
Canadian Dollar traders will also be looking to a speech from Bank of Canada Governor Lane this afternoon, with any dovish comments proving negative for the currency.
The GBP/CAD exchange rate will also be driven by any further coronavirus developments.