The Pound Canadian Dollar exchange rate has dipped this afternoon following better-than-expected retail sales figures from Canada.
At the time of writing GBP/CAD is currently trading at CA$1.7324 as souring market sentiment has weighed on the risk and commodity-sensitive Canadian Dollar. Or that weak oil prices are limiting the Canadian Dollar
Government Spending Limits Pound (GBP) Gains
The Pound has dipped against the Canadian Dollar this afternoon after the UK’s government spending reached an all-time high in February.
Coming in at £19 billion for February, the government’s spending had beat forecasts of £21 billion though beating forecasts did little to support the Pound.
David Madden, market analyst at CMC Markets UK, said:
‘Governments around the world are borrowing eye watering amounts to keep their respective economies afloat as the lockdowns have stifled growth and the UK is no different.’
‘Earlier this month, Rishi Sunak, Britain’s Chancellor of the Exchequer, revealed various schemes to provide much needed assistance to the economy, so the national debt is on track to keep on increasing in the months ahead.’
This morning the UK Gfk consumer confidence index has provided some support for Sterling sentiment as the reading was the highest it had been in a year, though the support did not last long.
Pound investors remain cautious surrounding delayed vaccine supplies for the UK in the coming months, with Prime Minister Boris Johnson leading a press conference yesterday evening.
Despite the Prime Minister saying that the UK should have ‘no anxiety’ about the vaccine supply, investors are concerned that the UK’s economic reopening may not happen as quickly as first laid out in the government’s roadmap.
Canadian Dollar (CAD) Bolstered Against the Pound by Better-Than-Expected Canadian Retail Sales
The Canadian Dollar has found support this afternoon from a better-than-expected retail sales report from Canada.
Canadian retail sales dropped -1.1% month-on-month in January, better than forecasts of -2.5%. It is still the second consecutive month of decline but shows a slight rebound and adds optimism to Canada’s economic recovery following the coronavirus pandemic.
Limiting the Canadian Dollar today however is a rally in US Treasury yields which has soured the global market mood.
Furthermore,oil prices, Canada’s largest export, continue to fall adding pressure to the commodity-correlated CAD.
Pound Canadian Dollar Outlook: UK Data in Focus Next Week
Heading into next week there are a lot of data releases from the UK expected to cause Pound movement, notably February’s inflation rate and PMI projections in the middle of the week.
UK inflation is forecast to show a modest growth which could add much needed support to GBP sentiment.
Canadian Dollar investors are in for a quieter week with CAD movement expected to be driven by US treasury yields and oil prices.
As the relationship sours between the US and China, many investors could flock to the safe-haven US Dollar, causing the market mood to sour and adding renewed pressure to the Canadian Dollar.
Comments are closed.