The Pound Canadian Dollar exchange rate held steady today despite rallying oil prices and a pickup in Canadian GDP in the first quarter. The Pound has instead strengthened against the ‘Loonie’ following the announcement of zero Covid-19 deaths for the first time in ten-months.
What’s Been Happening: Sterling Edges Higher as UK Reports Zero Covid-19 Deaths
The GBP/CAD exchange rate fluctuated this week after the commodity-linked ‘Loonie’ received a boost from soaring oil prices as WTI gained $1.40, or 2.1% and the US gauge rose to its highest level since 2018.
In addition, Canada’s latest GDP figure for the first quarter rose by 5.6%.
Douglas Porter, chief economist at BMO Capital Markets, said: ‘The bigger picture is that the Canadian economy has shown a clear ability to rebound rapidly when it even partially re-opens, and we would expect a similar quick comeback in coming months.’
Meanwhile, the Pound struggled at the beginning of this week as rising coronavirus infection numbers sparked fears that the Government could delay the further and final easing of lockdown measures on June 21.
However, GBP soon clawed back its losses after a Government spokesperson said that there is no evidence why further easing of lockdown measures this month should face a delay.
The Pound also benefited this week from an announcement of a day with zero Covid-19 deaths for the first time in ten months. This buoyed momentum in the GBP/CAD exchange rate.
Three Things to Watch Out for This Week
- UK Services PMI
Thursday 3 June will see the release of the final services PMI report for May. If this is revised upward, then we could see the GBP/CAD exchange rate head higher as the outlook for Britian’s economy improves.
- Canadian Unemployment Rate
Friday will see the publication of the latest Canadian unemployment rate report for May, which is expected to rise by 8.2%. As a result, we could see the ‘Loonie’ shed some of its gains as concerns grow over the nation’s levels of joblessness.
- Oil Prices
The commodity-linked ‘Loonie’ will continue to be driven by the price of oil this week. Could steadily growing oil prices further boost the Canadian Dollar?
Pound Canadian Dollar Forecast
The GBP/CAD exchange rate could struggle this week if demand for oil continues to rise. This would further boost oil prices and uplift the oil-sensitive ‘Loonie’.