Pound Canadian Dollar (GBP/CAD) Exchange Rate Wavers amid Mixed GDP Data
The Pound Canadian Dollar (GBP/CAD) exchange rate is wavering this morning, as a mixed set of GDP data weighs on Sterling.
Currently, GBP/CAD is trading at around CA$1.6903, showing little movement from today’s opening rates.
Pound (GBP) Wavers amid Mixed GDP Data
The Pound (GBP) is wavering this morning, as the latest set of GDP data paints a mixed picture of the UK economy.
While the UK managed to avoid a recession in Q1, the monthly data pointed to a shock 0.3% contraction over March. The UK’s services sector may have been the weight here, with car sales especially showing poor results.
Darren Morgan, Director of Economic Statistics at ONS, explained:
‘The fall in March was driven by widespread decreases across the services sector. Despite the launch of new number plates, cars sales were low by historic standards – continuing the trend seen since the start of the pandemic – with warehousing, distribution and retail also having a poor month.’
Ultimately, the evasion of a recession may be cushioning Sterling this morning. Over Q1, the UK’s economy expanded by 0.1% as forecast by economists.
Canadian Dollar (CAD) Undermined by Continuing Oil Price Volatility
The Canadian Dollar (CAD) is being undermined this morning, as oil price volatility continues to weigh on the ‘Loonie’.
This morning, prices are falling once again amid continued economic concerns in the US and China. As such, anxieties over demand from the world’s largest oil consumers are denting prices.
This could mark the fourth consecutive weekly decline, which is likely weighing on the oil-linked ‘Loonie’. Talks over the US Government’s debt ceiling were stalling, which is sparking further recession anxieties.
Similarly, new loans to Chinese businesses are appearing to decline, bring jitters over China’s economic recovery.
Elsewhere, reports that an oil production phaseout would cost the Canadian economy CA$74 billion may be harming CAD.
While just a theoretical scenario, the Canadian think tank Public Policy Forum found that a full phaseout may be disastrous. However, as there are no plans for a production cap, the anxieties may be unfounded.
GBP/CAD Exchange Rate Forecast: UK Unemployment Hold to Buoy GBP?
Looking ahead to early next week for the Pound, Tuesday brings the release of March’s unemployment rate. Currently, economists forecast this to hold at 3.8%, which may boost GBP.
With little slack appearing in the labour market, it could prompt increased rate hike bets from investors.
However, average earnings for March are forecast to have decreased, with the three-month yearly figure expected to print at 4.9%. This could offset any increased bets, as wage growth has been signalled as a key inflationary pressure.
April’s Canadian inflation data is due to print on Tuesday. A sharp cool in headline and core inflation is forecast, which may weigh on the Canadian Dollar.