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Pound Canadian Dollar Exchange Rate Dips Despite Falling Oil Prices

GBP/CAD Exchange Rate Falls as Oil Prices are Expected to Edge Higher

The Pound Canadian Dollar exchange rate dipped today despite the oil-sensitive ‘Loonie’ being undermined by falling WTI crude prices. The pairing is currently fluctuating around CA$1.73.

The Canadian Dollar has befitted from improving economic data, however, with the outlook for the nation’s economy showing signs of stronger-than-expected growth.

Today saw the release of the latest Canadian GDP figure for January, however, which beat forecasts and rose to 0.7%.

Royce Mendes, the, senior CIBC economist, commented on the figure:

‘The 0.7 per cent advance during the month, which was two ticks above expectations, was led by sectors which weren’t directly affected by stay-at-home orders.

‘That strength more than offset the weakness seen in retail trade, accommodation and food services which resulted from the orders necessary to curb virus transmission.’

However, oil prices are expected to creep higher as more and more people are vaccinated against Covid-19.

As a result, we could see the Canadian Dollar begin to head higher against many of its peers.

Pound (GBP) Falls as UK Markets Become More Cautious Despite Upward Revision for GDP Data

The Pound (GBP) struggled against the Canadian Dollar today despite the latest UK GDP data for the fourth quarter being revised up to 1.3%.

Rupert Thompson, chief investment officer at wealth management firm Kingswood, commented on the data:

‘This follows the recent stronger than expected numbers for business confidence which suggests the contraction in the first quarter will be smaller than first feared. Meanwhile, the fast vaccine rollout has bolstered hopes of a rapid rebound over coming months.’

Today also saw the Office for National Statistics (ONS) report that the UK now has an average of around 50% of people who have the antibodies against the Covid-19 – either from the vaccine or from having previously catching the virus.

As a result, UK markets are becoming more hopeful about the outlook for the nation’s economy as Covid-19 cases continue to fall.

GBP/CAD Exchange Rate Forecast: Could Rising Oil Prices Uplift the Canadian Dollar?

Canadian Dollar (CAD) investors will be awaiting tomorrow’s publication of the latest Canadian Markit Manufacturing PMI for March.

Any improvement in Canada’s manufacturing sector would prove CAD-positive.

Pound (GBP) traders will be looking ahead to tomorrow’s release of March’s UK Markit Manufacturing PMI.

If this figure indicates that the UK’s Manufacturing sector is recovering from the Covid-19 crisis, then the GBP/CAD exchange rate could head higher.

The Pound Canadian Dollar could head higher this week, however, if oil prices edge higher.