The Pound Canadian Dollar exchange rate has been rangebound for much of the day following the release of the latest flash UK PMI’s which have pointed towards a sustained growth in the country’s economy.
At the time of writing the GBP/CAD pairing are trending around the CA$1.7163 level as Canadian retail sales fell into contraction during April.
Pound (GBP) Firms on Flash PMI Data
The Pound has found itself rangebound against the Canadian Dollar today following the release of flash Markit PMI data from the UK for June.
Though the private sector PMI softened from record highs to 61.7, the figure was still one of the strongest monthly improvements seen since 1998.
Chris Williamson, Chief Business Economist at IHS Markit, commented on the preliminary figures:
‘Businesses are reporting an ongoing surge in demand in June as the economy reopens, led by the hospitality sector, meaning the second quarter looks to have seen economic growth rebound very sharply from the first quarter’s decline.’
‘There are some signs that the rate of expansion appears to have peaked, as both output and new order growth cooled slightly from May’s record performances, but full order books and a further loosening of virus-fighting restrictions should nevertheless help ensure growth remains strong as we head through the summer.’
Canadian Dollar (CAD) Supported by Weakening US Dollar (USD)
The Canadian Dollar has been strengthening for much of the day as a softer US Dollar bolsters the appeal of the ‘Loonie.’
The ‘Greenback’ has struggled to find demand recently as a more upbeat market mood limits the currency allowing the Canadian Dollar to push higher against its major rivals.
However, limiting any major gains for the Canadian Dollar have been the most recent retail sales figures from Canada which missed forecasts and fell back into contraction during April.
Retail Sales in Canada fell by 5.7% on month-on-month in April, below market forecasts of a 5% decrease, data published by Statistics Canada has shown this afternoon.
Pound Canadian Dollar Exchange Rate Outlook: BoE Interest Rate Decision in Focus
For Pound investors, tomorrow’s Bank of England (BoE) interest rate decision is expected to be the main drive for movement.
Interest rates are expected to remain at 0.1%, and if the BoE continues to be hawkish in their commentary regarding the UK’s economic performance then Sterling could head higher.
A quieter end of the week for the Canadian Dollar will see traders keeping an eye on any movement in the global market mood in the coming days.