Pound to Canadian Dollar Exchange Rate Falls in Aftermath of BoE Policy Decision
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate outlook remains gloomy due to Brexit uncertainty, and the latest Bank of England (BoE) policy decision didn’t do much to change that. Investors have been selling the Pound again in the aftermath of the decision.
Since opening this week at the level of 1.6861, GBP/CAD has been trending with an upside bias. GBP/CAD regained more of last week’s huge losses more easily due to Canadian Dollar (CAD) weakness.
However, GBP/CAD’s recovery hit a bump after today’s Bank of England news. At the time of writing, GBP/CAD was tumbling again and trended in the region of 1.7041. This meant it was still far below last week’s opening levels of 1.7347.
Weak Canadian data has kept CAD under pressure this week. However, if tomorrow’s Canadian retail report beats forecasts it could help leave the Canadian Dollar stronger at the end of the week.
Pound (GBP) Exchange Rates Knocked after Bank of England (BoE) Decision
The Pound (GBP) has spent most of this week advancing higher, but its advances came to an end after the Bank of England (BoE) held its September policy decision today.
While the bank said that UK data had been stronger than expected, it also continued to express concern about Britain’s outlook.
On top of this, the BoE also indicated that it was increasingly looking into the potential implementation of negative interest rates. While the bank did not signal that negative rates were on the way, it did show that the bank was more seriously considering such a move.
The news hit Sterling amid concerns that the BoE may only get more dovish going forward.
Canadian Dollar (CAD) Exchange Rates Remain Under Pressure
The Canadian Dollar has been generally unappealing this week. The currency has been under pressure due to fresh weakness in the US Dollar (USD), which it has a close correlation with, as well as poor Canadian ecostats.
Canadian manufacturing on Tuesday and Canadian inflation published yesterday all came in well below forecasts.
What’s more, today’s Canadian employment change report from ADP showed that jobs fell, rather than rising as expected.
Prices of oil, Canada’s biggest export, have also been too mixed to offer the Canadian Dollar more solid support. The commodity advanced earlier in the week, but today oil prices have been falling again.
These factors are making it easier for the Pound to sustain a recovery against the Canadian Dollar.
Pound to Canadian Dollar (GBP/CAD) Exchange Rate Investors Await Retail Reports
Both the Pound and Canadian Dollar are less appealing after today’s news. The Bank of England (BoE) news has knocked the Pound back from advance attempts, but the Canadian Dollar’s appeal is weighed by poor Canadian data and oil prices.
Mixed direction in the pair could mean that tomorrow’s upcoming retail stats could be especially influential.
UK retail sales from August and Canadian retail sales from July will be published throughout tomorrow’s session.
If UK data beats expectations, the Pound is more likely to sustain some of its recovery attempt. However, poor UK data may keep Sterling lower.
Canada’s retail stats could be even more influential. If Canadian retail data was concerning as well, fears about Canada’s economic resilience to the coronavirus pandemic may worsen.
Markets will remain focused on the Brexit process as well. If there are any surprise Brexit developments, this is sure to lead to Pound to Canadian Dollar exchange rate movement.