Pound Canadian Dollar (GBP/CAD) Exchange Rate Falters
The Pound Canadian Dollar (GBP/CAD) exchange rate falters again today, still barely recovering after the two-year low posted last week.
At time of writing, the GBP/CAD exchange rate is around CA$1.6577 , having fallen modestly from this morning’s open levels.
Pound (GBP) Subdued after Bank of England (BoE) Delivered Dovish Outlook
The Pound (GBP) continues to is struggling to find momentum at the start of this week’s session as Sterling sentiment continues to be undermined by the dovish outlook employed by the Bank of England (BoE) at its March policy meeting.
The BoE hiked interest rates by 25bps last week but struck a more dovish tone when hinting at its tightening plans going forward, stifling potential tailwinds for the Pound.
With UK data on the sparse side both today and tomorrow, the latest updates from Ukraine could drive most GBP movement until the inflation figures for February are announced on Wednesday.
This could limit the upside potential of the Pound as the breakdown in peace talks between Ukraine and Russia has soured the upbeat market mood that was present at the end of last week.
Canadian Dollar (CAD) Slides despite Oil Price Climb
The breakdown in peace talks between Russia and Ukraine is driving the price of oil up, bringing the cost of barrel at $109, and bolstering the appeal of the Canadian Dollar this afternoon.
Crude oil hit a 14-year high last week, strengthening the commodity-linked currency before quickly falling back.
However Brent oil has rebounded from its lows today with reports coming out that the European Union will consider an oil embargo on Russia.
Following in the footsteps of both the USA and UK, the 27-nation EU are considering an outright ban on the importation of Russian oil. Considering that the EU relies on Russia for 40% of its gas, it could prove to be an economically disastrous move.
With no Canadian date due to be released today, all eyes are on oil prices in driving the ‘Loonie’.
Pound Dollar Exchange Rate Forecast: Weaker UK PMIs to Drag on Sterling?
The March PMI’s of both UK and the Eurozone are set to be published this week, following on from a three-month high in February 2022, it is widely expected to show a slow down across the board which will no doubt impact the Pound Canadian Dollar exchange rate
UK inflation is expected to have increased in February, potentially lifting Sterling as the BoE faces further pressure to tighten monetary policy. According to analysts the inflation rate in the UK is projected to be 5.8% by the end of the quarter, all eyes will be on Wednesday when the figures will be announced for February.
After hopeful peace talks deteriorated at the tail end of last week, the Russia-Ukraine situation continues to affect the volatile market, impacting both the risk-sensitive Pound and the commodity-linked ‘Loonie’. The latter of which could be impacted by the fluctuating price of crude oil and global risk appetite.