Pound to Canadian Dollar Exchange Rate Gains Limited as CAD Investors Await Data
After a week of strong UK data, the Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate is on track to end the week up from its monthly lows. Canadian Dollar (CAD) demand is limited as investors anticipate key Canadian data due over the coming week.
Since opening this week at the level of 1.7289, GBP/CAD has been trending lower due to the Pound’s (GBP) broad weakness. CAD resilience has also kept the pressure up.
GBP/CAD briefly touched on a one-month-low of 1.7027 yesterday. The pair has been rebounding since then though. It is trending closer to the level of 1.7137 at the time of writing.
Whether or not the Pound recovers this week’s losses against the Canadian Dollar, may well depend on how investors react to this afternoon’s Canadian retail sales results.
Pound (GBP) Exchange Rates Find Support in Stronger UK Manufacturing Projections
The Pound is seeing a jump in demand today, following considerable losses in the middle of the week. The British currency is being supported by this week’s impressive UK data.
This week has seen a slew of notable ecostats published. The majority of these results came in stronger than analysts expected, boosting hopes of a UK economic rebound this year.
Friday rounded out a week of strong stats. Markit’s February PMI projections largely beat forecasts.
While the services PMI fell slightly short of expectations, manufacturing looks to avoid a forecast contraction of 49.7. Instead, the print showed surprising growth of 51.9.
Thanks to stronger manufacturing, the overall composite print remained at 53.3 rather than slowing to 52.8 as expected. According to Tim Moore, Associate Director at IHS Markit:
‘UK private sector growth held its ground in February as a stronger contribution from manufacturing output helped to keep overall business activity on a stronger path than any time since September 2018.’
Canadian Dollar (CAD) Exchange Rate Losses Limited as Investors Await Data
The Canadian Dollar has seen strong performance for most of the past week. It is weakening slightly today however.
Canadian data has been largely decent. It has kept investors hopeful that the Bank of Canada (BoC) will avoid taking a more dovish stance on Canadian monetary policy any time soon.
However, anticipation for upcoming Canadian data, as well as fresh risk-aversion, are keeping pressure on CAD.
The Canadian Dollar benefitted for most of the week from slightly softer coronavirus jitters and recovering prices of oil, Canada’s most lucrative commodity.
Coronavirus jitters are worsening again today though, and oil prices are tumbling again. As a result, the Canadian Dollar has struggled to hold its best levels.
Still, anticipation for upcoming Canadian data due today and next week is keeping investors from selling the Canadian Dollar too much.
Pound to Canadian Dollar (GBP/CAD) Exchange Rate Outlook to be influenced by Canadian Data
Most of this week’s key UK data was fairly strong. As next week’s UK economic calendar is quieter, the Pound is more likely to be driven by movement in rival currencies and Brexit developments.
Key Canadian data is due throughout next week though. The Canadian Dollar could be even more influenced by surprising ecostats, especially if they influence Bank of Canada (BoC) speculation at all.
Monday will see the publication of Canada’s December wholesale sales results. Weekly earnings will be published on Thursday, with key growth results due on Friday.
If Canada’s Q4 Gross Domestic Product (GDP) growth rate beats expectations next Friday, the Bank of Canada will have less reason to cut Canadian interest rates.
However, poor Canadian growth data would be a notable negative for Canada’s outlook. This could lead to BoC rate cut bets and Canadian Dollar losses.
Of course, the trade-correlated Canadian Dollar remains sensitive to shifts in coronavirus and oil price news. Overall, the Canadian Dollar’s movement could be pivotal for the Pound to Canadian Dollar (GBP/CAD) exchange rate next week.