Pound Canadian Dollar (GBP/CAD) Exchange Rate Narrows as Ivey PMI Soars Past Forecasts
(Article updated 15:48, 6/4/23) The Pound Canadian Dollar (GBP/CAD) is narrowing this afternoon, following the release of the latest Ivey PMI. Canada’s economic index printed significantly above forecasts, coming in at 58.2, significantly above the expected print of 56.1.
With the Canadian economy seen to be growing at a much faster pace that expected, the ‘Loonie’ was able to shrug off some of the losses from falling oil prices. Furthermore, the unemployment rate held at 5%, indicating that the Canadian labour market remains moderately healthy.
However, continued falls in crude oil prices may be preventing the Canadian Dollar from capitalising on the upbeat data releases. Currently, crude prices are down by almost 0.4% from the morning’s opening rates, having fallen a further 0.2% since earlier readings.
At the time of writing, GBP/CAD is trading at around CA$1.6759, showing little movement from the morning’s opening rates.
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Pound Canadian Dollar (GBP/CAD) Exchange Rate Firms amid Softening Oil Prices
The Pound Canadian Dollar exchange rate is edging higher this morning, as softening oil prices weigh on the ‘Loonie’.
At the time of writing, GBP/CAD is trading at around CA$1.6804, an increase of roughly 0.2% from the morning’s opening rates.
Canadian Dollar (CAD) Ticks Lower amid Softening Oil Prices
The Canadian Dollar (CAD) appears to be edging downward this morning, as oil prices soften from earlier heights.
Following Sunday’s shock announcement of production cuts by OPEC+, oil prices skyrocketed. This meant that the oil-linked ‘Loonie’ was able to gain firm ground against some peers.
Thus far this morning, oil prices are decreasing. Crude oil is weakening by 0.2% at the time of writing.
Adding a further headwind to CAD could be the afternoon’s unemployment data release. With March’s unemployment rate expected to increase to 5.1%, jitters over the Canadian labour market may be on the rise.
Elsewhere, CAD may be being underpinned by renewed strength in the US Dollar. As the pair share a close correlation, the overnight recovery and morning consolidation could have brought a tailwind.
Pound (GBP) Wavers as Data Drought Rolls On
The Pound (GBP) is wavering this morning, as the data drought continues to leave Sterling vulnerable to external factors.
An apparent modest increase in risk appetite may be bringing some tailwinds for GBP. This is because the currency holds an increasingly risk-sensitive nature.
However, geopolitical tensions may be muting these potential gains. Tensions between China and America over Taiwan could be placing a dampener on more risk-driven investments. With China expected to retaliate to the US’ recent arms support to Taiwan, trade restrictions are expected.
Furthermore, recent weakness in the US economy is serving to spark global recession anxieties. With this in mind, the expectation could be that the UK economy may similarly show signs of slowdown.
However, on the domestic front, UK house prices appear to have stabilised. This morning, house prices were shown to have increased for the third month in a row.
With the UK housing market seeing volatility over last year, the news that some form of stability is returning to the market may be bringing some optimism for GBP investors.
GBP/CAD Exchange Rate Forecast: Ivey PMI to Boost CAD?
Looking ahead for the Canadian Dollar, this afternoon brings a duo of key data releases which may sway the ‘Loonie’.
First up, the latest unemployment rate. March’s figure is forecast to tick upward to 5.1%, which could weigh on CAD by pointing to a weakening labour market.
This is soon followed by the latest Ivey PMI. This is forecast to increase to 56.1, reflecting further growth in March. This could bring a boon to the ‘Loonie’ by alleviating anxieties over the Canadian economy.
For the Pound, markets will be closed tomorrow as the UK observes the Easter holiday. As such, Sterling is likely to trade entirely on the fluctuations in other currencies.