GBP/CAD Exchange Rate Rises as Outlook for UK Economy Improves
The Pound Canadian Dollar rose by 0.5% today as the UK has taken its first big step in easing lockdown restrictions, with groups of six now allowed to meet outdoors in England. The pairing is currently fluctuating around CA$1.74.
Pound traders are now more hopeful about the UK economy. The nation is now in the process of taking its first cautious steps toward opening its economy in the next few months.
However, Prime Minister Boris Johnson urged caution in an overnight statement, saying:
‘We must remain cautious, with cases rising across Europe and new variants threatening our vaccine rollout. Despite today’s easements, everyone must continue to stick to the rules.’
In UK economic news, today saw the publication of the latest mortgage approvals figure. The data revealed that latest figures had fallen below forecasts, sparking some concern about the health of Britain’s economy.
However, Pound traders are confident overall in the nation’s economy, with hopes growing that a falling number of Covid-19 cases will help speed-up the reopening of many of the key sectors.
Canadian Dollar (CAD) Struggles as Oil Prices Begin to Dip
The Canadian Dollar (CAD) failed to rise against Sterling despite the oil-sensitive currency gaining some support as WTI oil has rebounded back above $60 per barrel.
However, today saw oil prices begin to fall after the Ever Given container ship was re-floated in the Suez Canal.
Harry Robertson, an analyst at Business Insider, commented:
‘The fall in oil prices was a sign that the pressure on global supply chains is set to ease, with the local authorities saying they will act fast to try to clear the backlog of ships at the crucial trade route.’
Canadian Dollar investors are largely hopeful about the outlook for the Canadian economy, however, after the IMF expressed confidence in the nation’s recovery in the months ahead.
Mikal Skuterud, an economics professor at the University of Waterloo, was more uncertain, saying:
‘We saw some (economic recovery) in February. I expect almost certainly we’re going to see some of that improvement in March. But it’s slow. We’re still a long way off.’
Pound Canadian Dollar Exchange Rate Outlook: Could Rising Oil Prices Boost the ‘Loonie’?
The Canadian Dollar (CAD) will remain sensitive to oil prices this week, with any signs of improvement in the value of WTI boosting the CAD/GBP exchange rate.
Looking ahead, Wednesday will see the release of the latest Canadian GDP data. If this points to a marked improvement in the economy, then CAD would benefit.
The Pound Canadian Dollar could head higher this week if the outlook for the UK economy continues to improve in tandem with falling Covid-19 infections.