Pound Canadian Dollar Exchange Rate Firms as Boris Johnson Confirms No New Covid Curbs in England

Pound Canadian Dollar (GBP/CAD) Exchange Rate Bolstered by Government’s Resistance to New Restrictions

The Pound Canadian Dollar Exchange Rate spiked as the European session opened this morning, hitting its highest point since September 2021. This is possibly due to UK Prime Minister’s press conference last night briefly strengthening the Pound. Whilst the gain was short lived, the currency pair has continued to slowly climb.

At time of writing the GBP/CAD exchange rate is at around $1.7219, which is up roughly 0.2% from this morning’s figures.

Pound (GBP) Ticks Upward as UK PM Announces No Further Restrictions

The Pound has remained largely muted against its rivals today following an early morning spike. A press conference by Prime Minister Boris Johnson last night may have helped to boost Sterling, as Johnson announced no additional restrictions for the UK.

Johnson stated that he believed England could withstand the impact of the Omicron variant, despite continued pressure on the UK’s health service and a new record high of 218,724 cases reported on Tuesday. Johnson also announced that daily testing efforts for around 100,000 critical workers would be ramped in an attempt to curb staff shortages, with further reports on Wednesday morning indicating that the government will be dropping the requirement for follow-up PCR tests.

Whilst the lack of new restrictions could have helped buoy the Pound, the continuation of ‘Plan B’ measures and poor supply of Covid tests may undermine any of the currency’s potential gains. Dr Mike Tildesley, member of Scientific Pandemic Influenza Modelling Group from the University of Warwick, said that it was still unclear as to whether case numbers had peaked:

‘The next few days will be really, really key for us to try to identify that – children are going back to school, we’ve had sort of differences in mixing patterns over the Christmas period and we are yet to see what happens in the data as a result of that.’

Canadian Dollar (CAD) Dips as Schools Closed to Limit Spread of Omicron

The Canadian Dollar (CAD) has fallen against many of its rivals today as Covid-19 cases across the country’s Ontario province soar.

Ontario reported 13,578 on Monday amid the introduction of fresh restrictions to combat the spread of the Omicron variant. School have moved to remote learning and retail settings have been limited to 50% capacity. The measures have been criticised by retail and hospitality industry leaders, who argue that the Ontario and federal governments need to provide additional support to businesses.

Losses for the commodity-tied ‘Loonie’ may be supported by the price of oil today, as the price of crude oil per barrel stabilised around $77.01 a barrel. It’s thought that investors were assessing the impact of the Omicron variant on the commodity, although increased US production may limit any upside. It’s likely that CAD may well be affected by the ongoing volatile market sentiment surrounding the commodity.

GBP/CAD Exchange Rate Forecast: Will UK Growth Slow Further?

Looking to the rest of the week, the final reading of the December’s PMI for the UK’s services sector could push the Pound further down on Thursday. Forecasts are predicting a sharp decline in the sector’s growth, potentially owing to the hospitality sector’s struggles over the winter period.

Canada’s unemployment rate is forecast to remain virtually unchanged on Friday, although even a slight further decline in printed figures would represent a seventh consecutive month of growth in the country’s job market. Friday will also bring December’s Ivey PMI reading, which is currently predicted to show a slight slowdown in growth. This data could help boost CAD slightly if it prints as expected.

Gareth Monk

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