Pound Canadian Dollar Exchange Rate Fluctuates on Ever-Gloomy UK Economy
The Pound Canadian Dollar (GBP/CAD) exchange rate is zigzagging this morning amid an upbeat market sentiment but soured by plummeting mortgage approvals.
At time of writing the GBP/CAD exchange rate is trading around $1.6135, relatively unchanged from this morning’s opening levels.
Pound (GBP) Undermined by Falling Mortgage Approvals
The Pound is struggling to find a clear direction this morning in the face of lending data and a fall in mortgage approvals. Another decline in mortgage approvals, the lowest since June 2020, points to a cooling housing market.
The drastic drop in mortgage approvals is just another sign that the housing market, and the UK economy itself, is slowing. Karim Haji, UK Head of Financial Services at KPMG, said of the latest data:
‘It’s not hugely surprising, being a combination of the higher rates attached to products on the market, which have made them less affordable for many, and caution among consumers about taking on large new financial commitments in such a gloomy environment.’
Meanwhile, consumer lending figures rose by £0.769bn in the month of October, falling short of forecasts of £0.9bn. UK households are continually having to turn to credit to cope with the cost-of-living crisis.
Canadian Dollar (CAD) Quiet Ahead of GDP Growth Data
Meanwhile, the Canadian Dollar is left zigzagging despite the upbeat market mood as China could be easing restrictions.
In the wake of mass protests throughout China, markets have been cautious of further economic slowdown. However, news out of China this morning that the world’s second largest economy will be ramping up vaccinations to the elderly. Making up a significant portion of the country, an increased rollout could lead to a relaxing of China’s zero-Covid policy. Global Times commentator Hu Xijin tweeted that ‘China may walk out of the shadow of COVID-19 sooner than expected.’ Such news would be cheered by the market.
Meanwhile, limiting any gains for the Canadian Dollar is the tumbling of oil prices. With concerning news out of China sapping demand, WTI crude fell below $80 a barrel. However, with a more positive risk sentiment, oil could climb again, and in turn, the ‘Loonie’.
Pound Canadian Dollar Forecast: Canadian GDP to Weigh on Loonie?
Looking ahead, the Pound Canadian Dollar exchange rate could see further fluctuations with the release of GDP growth data. An expected slowdown in growth could weigh on the Canadian Dollar. However, it would still mark a predicted fifth consecutive month of growth.
Meanwhile, the Bank of England (BoE) Governor Andrew Bailey is set to testify in front of the House of Lords Committee. Considering little has come out of the central bank in relation to the autumn statement, any comments on the BoE’s monetary policy going forward could be influential.