Pound Canadian Dollar Exchange Rate Steady as Study Shows Omicron Results in Milder Symptoms

Pound Canadian Dollar (GBP/CAD) Exchange Rate Steady on Omicron Optimism 

The Pound Canadian Dollar (GBP/CAD) exchange rate is trading in a narrow range so far this morning, as early studies support the suggestion that the Omicron Covid variant results in milder illness. 

At the time of writing the GBP/CAD exchange rate is trading at around CA$1.7171, virtually unchanged from this morning’s opening levels. 

Pound (GBP) Buoyed by Positive UK Omicron Study 

The Pound (GBP) is drawing support this morning after a report from the UK suggested that Omicron is resulting in milder symptoms than previous variants of Covid

Preliminary studies published in the UK and South Africa, suggests that infection with Omicron results in far fewer hospitalisations, with estimates of a 30%-70% reduction in hospital visits. 

Prof Cheryl Cohen of the National Institute for Communicable Diseases, in South Africa, commented: 

‘Compellingly, together our data really suggest a positive story of a reduced severity of Omicron compared to other variants.’ 

The news has been welcomed by investors this morning, and is lifting Sterling sentiment as it bolsters market risk appetite, despite warnings that Omicron could still overwhelm hospitals due to the speed at which it spreads. 

However the Pound’s gains remain tempered by Brexit uncertainty. Hopes that Liz Truss’ appointment as the UK’s Brexit negotiator would lead to a reset of talks following the exit of David Frost have so far been quashed as Truss appears to be largely following in the footsteps of her predecessor. 

Her warning that the UK is still prepared to trigger Article 16 of the Northern Ireland protocol has come as particularly disappointing to GBP investors, as it leaves the risk  

Canadian Dollar (CAD) Dented by Sliding Oil Prices 

At the same time, the Canadian Dollar (CAD) is muted this morning amidst a modest drop in oil prices. 

WTI crude oil prices have fallen roughly 0.4% this morning to $72.49 a barrel, leaving it just below the almost one-month high struck on Wednesday. 

However, today’s drop comes in spite of the wider market rally being driven by reports that the Omicron Covid variant is causing milder symptoms than Delta. 

With crude accounting for roughly 16% of Canada’s total exports, weaker oil prices can have a notable impact on the appeal of the Canadian Dollar. 

Pound Canadian Dollar Forecast: Canadian GDP In Focus this Afternoon 

Looking ahead to later this afternoon, the Pound Canadian Dollar exchange rate could come under some modest selling pressure with the release of Canada’s latest GDP figures. 

October’s figures are expected to report a strong expansion of economic activity month-on-month, with analysts forecasting growth will have jumped from 0.1% to 0.8%, likely reflecting positively on the ‘Loonie’. 

Meanwhile, GBP investors will be keeping an ear out for any rumours regarding the government’s plans for further restrictions in England, as every other nation in the UK has announced new measures to start from Boxing Day. 

Matthew Andrews

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