Support for the Pound to Canadian Dollar exchange rate proved limited as doubts over the future of the UK steel industry reared their head once again.
Last Week: Leap in Oil Prices Fails to Prevent Pound Canadian Dollar Exchange Rate Rally
While the blockage of the Suez Canal saw oil prices rise sharply ahead of the weekend this was not enough to keep the Canadian Dollar from shedding some ground against its rivals.
CAD exchange rates weakened in response to the latest widening of the Canadian budget balance deficit, with signs pointing towards a deteriorating fiscal picture.
As UK retail sales picked up as forecast on the month in February this offered a fresh boost to the Pound, meanwhile.
With higher levels of consumer spending likely to shore up the first quarter gross domestic product the GBP/CAD exchange rate gained fresh traction.
Three Things to Watch out for This Week
1. Canada Gross Domestic Product
Demand for the Canadian Dollar could pick up on Wednesday, though, with the release of January’s monthly gross domestic product data.
As forecasts point towards a moderate uptick in growth on the month CAD exchange rates may find solid traction in the wake of the report.
2. Canada Manufacturing PMI
Confidence in the outlook of the Canadian economy could improve further if March’s manufacturing PMI also shows an improvement.
Fresh evidence of positive growth within the manufacturing sector would increase the odds of the economy remaining on a resilient footing, offering the Canadian Dollar a fresh boost against its rivals.
3. UK Manufacturing PMI
As long as the finalised UK manufacturing PMI for March confirms that the sector remained firmly in a state of growth this should limit the downside potential of GBP exchange rates.
However, any negative revision to the PMI could well see the Pound losing its footing once again, even as hopes of a positive first quarter growth performance remain.
GBP/CAD Exchange Rate Outlook
Fresh signs of resilience within the Canadian economy and rising odds of a stronger first quarter gross domestic product could see the Pound to Canadian Dollar shedding ground this week.