Pound Canadian Dollar (GBP/CAD) Exchange Rate Firms as GBP Investors Price in for New Week

Pound Canadian Dollar (GBP/CAD) Exchange Rate Climbs as Investors Reinvest in GBP

The Pound Canadian Dollar (GBP/CAD) exchange rate strengthened this morning as investors buy the oversold Pound (GBP), correcting the sell-off from late last week.

At the time of writing the GBP/CAD exchange rate is trading around CA$1.5424, which is roughly up 0.6% from this morning’s opening rate.

Pound (GBP) Recovers from Last Week’s Sell-Off

The Pound is up against the majority of its peers this morning as investors readjust their expectations for the week ahead.

The Pound was sold off last week as the Bank of England (BoE) announced the country was now in a recession that could last up to two years.

However, it would seem that this morning the Pound is attempting to recover some ground as investors correct their overselling of GBP amid economic concerns.

Elsewhere, an upbeat mood in European markets is lending support to the increasingly risk-sensitive Pound. Friday’s market optimism seems to have extended into this week’s trade, boosted by strong German industrial production figures and good earnings reports.

Canadian Dollar (CAD) Gains Capped by China’s Zero-Covid Reformation

The oil-linked Canadian Dollar (CAD) is struggling for support this morning, despite a rise in the price of crude.

At the time of writing, WTI crude oil is trading around $91.77 per barrel, up around 70 cents from this morning’s opening. However, it has yet recovered its losses from the weekend.

As the world’s biggest importer of crude oil, China cheered markets last week amid rumours the Chinese government might be easing Covid restrictions.

However, over the weekend the Chinese government reaffirmed their support of their strict Covid policies, which saw oil prices fall by 1% when markets opened.

Hu Xiang, an official at National Health Commission’s disease prevention and control bureau, said on Saturday:

‘[China’s] previous practices have proved that our prevention and control plans and a series of strategic measures are completely correct.’

Concerns over the China’s oil demand moving forward are pressuring the ‘Loonie’ today.

Pound Canadian Dollar Exchange Rate Forecast: GBP to Move on Economic Sentiment?

Later today, the GBP/CAD exchange rate could move in line with domestic headlines.

A lack of data for the rest of the day could see investors refocus on the UK’s weakening economy. Any headlines pertaining to the cost-of-living crisis could see Sterling lose its gains.

Turning to tomorrow, a speech from BoE policymaker Huw Pill could impact the Pound. If Pill continues to sound the alarm over the UK’s recession and says that interest rate rises could slow, the Pound may face headwinds.

For the rest of the day, the Canadian Dollar could continue to move in line with fluctuations in the oil market. Further developments within China could dent CAD further.

Lauren Coulson

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