The Pound Canadian Dollar (GBP/CAD) exchange rate has firmed since markets opened this morning as optimism over the UK’s lockdown easing grows.
At the time of writing the GBP/CAD pairing are trending around the CA$1.7119 level as a softer tone surrounding crude oil prices limited the appeal of the ‘Loonie.’
Pound (GBP) Supported by Lockdown Easing Hopes
The Pound has found itself supported this morning following health secretary Sajid Javid’s insistence that the final set of lockdown easing measures in the UK will go ahead on the 19th July.
Speaking to parliament yesterday evening the newly-appointed health secretary said:
‘Whilst we decided not to bring forward step four, we see no reason to go beyond the 19th of July. Because in truth no date we choose comes with zero risk for Covid. We know we cannot simply eliminate it. We have to learn to live with it.’
It comes as the UK is seeing Europe’s highest number of daily new cases as the more transmissible delta variant spreads across the country.
A further 22,868 confirmed cases in the UK were announced yesterday, however whilst cases rise hospital admissions remain stagnant and deaths from the virus are low as vaccinations appear to be keeping the nation safe.
Canadian Dollar (CAD) Struggles as Oil Prices Soften
The Canadian Dollar has been struggling for direction this morning as a softer tone surrounding oil prices and a strengthening US Dollar limits the commodity-correlated ‘Loonie.’
Oil prices yesterday suffered a pullback from their highest levels seen since 2018 as concerns over the delta variant of coronavirus surging across the globe worried investors.
More so a strengthening US Dollar further limited the appeal of the Canadian Dollar as markets believe the Federal Reserve (Fed) will tighten its monetary policy earlier if inflation pressures continue to increase.
Pound Canadian Dollar Exchange Rate Outlook: GDP Figures in Focus
For Pound investors, tomorrow will see the final GDP growth rate reading from the UK for Q1 which could cause Sterling to suffer as it is expected the figure will confirm the UK economy contracted at the start of the year as the country battled coronavirus.
Canadian Dollar traders will themselves be looking to GDP figures from Canada for April which are forecast to have fallen 0.8%, a figure which could cause the ‘Loonie’ to weaken further.
The GBP/CAD exchange rate will continue to be driven by any further coronavirus developments in the coming days as markets keep an eye on the delta variant of the virus.