Pound Canadian Dollar Exchange Rate Firms in the Wake of UK GDP Data
The Pound Canadian Dollar (GBP/CAD) exchange rate is climbing this morning as UK GDP data printed better than expected.
At the time of writing the GBP/CAD exchange rate is trading around CA$1.5348, which is roughly up 0.4% from this morning’s opening rate.
Pound (GBP) Strengthening as GDP Beats Forecasts
The Pound (GBP) is pushing higher this morning as the UK’s finalised GDP figures for the second quarter reported a surprise expansion of growth.
Previous GDP estimates had indicated the UK economy would contract from 0.8% to -0.1% in Q2. However, investors were pleasantly surprised to see this revised up to 0.2% in the final reading. The positive growth print means the UK isn’t already in a recession.
Whilst this has brought some relief to the Pound this morning, analysts warn that it still won’t be enough to make the government’s fiscal plans any easier to implement.
According to Paul Dales, chief UK economist of Capital Economics said this morning:
‘The bad news is that contrary to previous thinking, it still hasn’t returned to pre-pandemic levels. It’s the only G7 economy in that situation and it makes the chancellor’s fiscal plans look even more untenable.’
Adding further volatility into the Pound this morning is Lizz Truss’s meeting with the Office of Budget Responsibility (OBR). This meeting comes after Chancellor Kwasi Kwarteng chose not to publish a draft forecast of the mini budget alongside the fiscal plan last Friday.
Canadian Dollar (CAD) Buoyed by Rising Oil Prices
The Canadian Dollar (CAD) is trading broadly higher against most of its peers this morning amid an uptick in oil prices.
At the time of writing WTI crude oil prices are trading around $82 per barrel, up roughly 0.1% on the day. With WTI on track to close the week in positive territory.
This could help end a string of weekly losses after oil prices were pummelled in September by investor concerns that an approaching global recession could dent crude demand.
Meanwhile the Canadian Dollar also continues to benefit from Canada’s own GDP release on Thursday, after July’s figures were revised higher.
Pound Canadian Exchange Rate Forecast: GBP to Trade on Domestic Headlines?
Later today, the Pound Canadian Dollar exchange rate could find fresh impetus for movement in response to UK domestic headlines.
In lieu of any data today, it’s possible that the Pound could continue to firm as investors await news from Truss’s meeting with the OBR.
In the absence of any data, movement in the Canadian Dollar will likely remain tied to oil price dynamics. Could a continued uptick in the commodity help the ‘Loonie’ to strengthen this afternoon?