Pound Canadian Dollar Exchange Rate Trades Narrowly as Pessimism Grows in the Ukraine Crisis
The Pound Canadian Dollar (GBP/CAD) exchange rate is trading sideways today as confidence in the Ukraine-Russia peace process continues to weaken.
At time of writing the GBP/CAD exchange rate is around $1.6393, relatively unchanged from this morning.
Pound (GBP) Falters as Uninspiring BoE adds to Ukraine Uncertainty
The Pound (GBP) is trending sideways against the Canadian Dollar today as Ukraine-Russia tensions escalate amid fresh accusations from Ukraine over alleged war crimes committed by Russia in the town of Bucha.
Ukrainian President Volodymyr Zelenskiy has accused Russia of carrying out a massacre in Bucha, a town 30km northwest of Kyiv. With world leaders voicing their condemnations of Russia and their ongoing attacks, British Prime Minister Boris Johnson has announced that his government will step up sanctions on Russia and continue the supply of munitions and supplies for Ukraine.
German defence minister Christine Lambrecht announced on Sunday that the European Union must discuss the banning of Russian imports sooner rather than later. Another stumbling block in the road to peace, with any drop in optimism likely to impact the Pound and exacerbate the ongoing cost-of-living crisis.
Canadian Dollar (CAD) Looks to Rally Further amid Strong Data
The Canadian Dollar (CAD) saw modest gains against the Pound as optimism grew with the imminent release of the Bank of Canada (BoC) Business Outlook Survey. Economists at ING predict a strong reading to boost the ‘Loonie’ against most of its peers:
“Strong readings for sales, employment, investment, and inflation expectations could build expectations of a 50bp hike from the BoC next week – a 44bp hike is currently priced.”
With the ongoing Ukraine crisis showing no signs of peace, the commodity market remains volatile. The price of WTI crude oil remained on the defensive, relatively unchanged from last week, sitting at $95.00 a barrel.
Pound Canadian Dollar Forecast: Strong Canadian Data to Further Subdue the Pound?
Looking ahead, focus will be on major Canadian data due out this week, starting with the Bank of Canada (BoC) releasing its quarterly Business Outlook survey today. Expectations of a continued aggressive stance on inflation could bolster the Canadian Dollar.
A much-needed boost to the Pound Canadian Dollar exchange rate could come with the release of the S&P Services PMI data on Tuesday. A projected increase to 61 in March from February’s 60.5 comfortably beat out market forecasts of 58. Market analysts predict the fastest expansion in the services industry in nine months as the economy slowly reopened after Covid restrictions were lifted.
All eyes will remain on the ongoing crisis in Ukraine as both the risk-sensitive Pound and the commodity-linked Canadian Dollar weigh heavily on any further developments.