Pound Canadian Dollar Exchange Rate Low as Canadian Dollar Capitalises on Market Mood
The Canadian Dollar (CAD) continues to see strong performance this week, as the Pound Canadian Dollar (GBP/CAD) exchange rate is being kept under pressure. Sterling’s (GBP) attempts to recover are limited as the Bank of England (BoE) is awaited.
After opening last week at the interbank level of 1.75, GBP/CAD briefly attempted to climb before slumping over a cent at the end of the week. GBP/CAD closed last week at the interbank level of 1.73.
GBP/CAD has continued to see bearish movement this week so far, briefly touching on a month and a half low of 1.72 before rebounding and steadying slightly. GBP/CAD trends closer below the week’s opening levels at the time of writing.
Pound investors are awaiting tomorrow’s Bank of England policy decision. Meanwhile, Canadian Dollar traders await Federal Reserve news and anticipated Canadian retail sales stats at the end of the week.
Pound (GBP) Exchange Rates Steady Ahead of Central Bank Decisions
The Pound has seen a strong rally in recent weeks, on expectations that Britain will be one of the first major economies to recover from the coronavirus pandemic.
This rally has slowed over the past week though. Amid a lack of surprising upside developments in the Pound outlook, investors are hesitant to keep buying the British currency.
Concerns about Brexit and coronavirus vaccines have limited Sterling demand a little as well. The EU will reportedly take legal action over allegations that the UK breached the Northern Ireland Protocol.
Vaccine concerns have softened slightly since yesterday though. Analysts noted that markets were a little calmer after UK officials and experts dismissed concerns over the AstraZeneca vaccine.
Canadian Dollar (CAD) Exchange Rates Remain Broadly Appealing
The Canadian Dollar has been one of the most broadly appealing major currencies lately. It continues to see bullish performance this week, despite weaker prices of oil, Canada’s biggest export.
The Canadian Dollar is benefitting from global risk-on movement and expectations for recovery from the coronavirus pandemic in the US and Canadian economies.
According to Greg Anderson, Global Head of Forex Strategy at BMO Capital Markets, the Canadian Dollar is also gaining as markets adjust positions today:
‘What that shows is there’s still people out there who were caught unawares by the suddenness of the CAD rally and are probably struggling to cover their exposures’
Pound Canadian Dollar (GBP/CAD) Exchange Rate Focused on BoE and Canadian Data
Investors are highly anticipating major central bank developments and Canadian data due for publication in the coming sessions.
Following tonight’s Federal Reserve policy decision, the Bank of England (BoE) will hold its own March policy decision tomorrow. If the BoE maintains an optimistic outlook on Britain’s economic recovery chances, the Pound could see stronger demand through the end of the week.
However the Pound may struggle to sustain a recovery against the Canadian Dollar, especially if the Canadian Dollar also sees stronger demand.
Key Canadian data due in the coming sessions could make investors more confident in Canada’s economic resilience if it impresses.
Canada’s February employment data from ADP will be published tomorrow.
However Friday’s Canadian retail sales results from January could cause big Canadian Dollar movement if they surprise investors, and highly influence the direction of late-week Pound Canadian Dollar (GBP/CAD) exchange rate trade.