Pound to Canadian Dollar Exchange Rate Steadies Following Days of Brexit Losses
After the sharp movements seen in the Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate at the beginning of the week, the pair’s movement steadied off a little bit today. Canadian Dollar (CAD) investors highly anticipate major Canadian data and Federal Reserve news this afternoon.
Despite a rise in Canadian Dollar weakness last week, GBP/CAD has continued to fall lower and lower over the past few months. No-deal Brexit fears have dominated Sterling (GBP) outlooks, and Canadian data weakens the ‘Loonie’.
After opening this week at the level of 1.6320, GBP/CAD saw a significant plummet on Monday in response to Brexit fears, and remained weak on the same factors yesterday.
This morning, GBP/CAD touched on a low of 1.5963 – which was the worst level for the pair since September 2017. At the time of writing, GBP/CAD was trending closer to the level of 1.6000 again.
Pound (GBP) Exchange Rates Steady after Two Days of Losses
The Pound saw a broad, market-wide plummet on Monday, as concerns rose that Britain’s new Prime Minister Boris Johnson could lead the nation towards a worst-case scenario no-deal Brexit.
No-deal Brexit fears have only risen since the new government came into power, limiting any gains the Pound saw from easing political uncertainty.
Johnson has indicated that he will not accept the Brexit deal unless the EU is willing to compromise on the controversial Irish backstop issue.
His officials have also indicated that the government is working under the assumption of a no-deal Brexit.
These factors kept the Pound weak yesterday, and limited the Pound’s potential for rebound this morning. Sterling edged higher, but it wasn’t much of a notable recovery.
Canadian Dollar (CAD) Exchange Rates Steady in Anticipation of Major News
Following weeks of strong performance, the Canadian Dollar weakened last week as speculation rose that weak Canadian data could pressure the Bank of Canada (BoC) to cut Canadian interest rates over the coming year.
However, this was unable to help GBP/CAD gains as the Pound remained too unappealing. The Canadian Dollar has been a little more resilient this week so far, which has made it even easier for the currency to push even higher versus Sterling.
There has been little in the way of Canadian news this week so far.
As a result, CAD has been buoyed by expectations of a Federal Reserve interest rate cut this week, as well as higher prices of oil, Canada’s most lucrative commodity.
The Canadian Dollar’s movement is more limited today. The currency is steadying ahead of major Canadian data due this afternoon, as well as of course the Federal Reserve’s upcoming policy decision.
Pound to Canadian Dollar (GBP/CAD) Exchange Rate Investors Await Canadian Growth and Fed Decision
Today is likely to be the most influential session of the week for Canadian Dollar investors, as major Canadian data will be published.
Canada’s Gross Domestic Product (GDP) growth rate report from May will be published this afternoon.
It’s likely to be the most influential dataset of the week for Canadian Dollar traders, and will give investors a better idea of how Canada’s economy is performing amid the global economic slowdown.
Canadian growth is forecast to have slowed to just 0.1% in May. If it comes in lower than expected, Bank of Canada (BoC) interest rate cut speculation could rise and the Canadian Dollar could slump.
However, stronger Canadian growth data would cause GBP/CAD to fall even lower.
Of course, this evening’s Federal Reserve news could also be highly influential for the Canadian Dollar. If the Fed is more dovish than markets expect the Canadian Dollar is likely to benefit from US Dollar (USD) weakness.
The Pound is unlikely to be driven by much besides Brexit news in the coming days, but tomorrow’s Bank of England (BoE) policy decision could influence the Pound to Canadian Dollar (GBP/CAD) exchange rate as well.