The Pound Canadian Dollar exchange rate has been on the back bench for much of today’s session but is beginning to regain any losses following a fall in Canadian trade surplus.
At the time of writing the GBP/CAD pairing are currently trading at around CA$1.4398.
Pound (GBP) Limits Losses on back of Positive UK Services PMI
The Pound has limited any losses against the Canadian Dollar today following the positive UK services PMI for March.
At 56.3, narrowly missing forecasts of 56.8, the UK services PMI passed into growth level for the first time since October 2020.
Tim Moore, Economics Director at IHS Markit, commented on the latest PMI data saying:
‘UK service providers were back in expansion mode in March as confidence in the roadmap for easing lockdown restrictions provided a strong uplift to new orders. Total business activity increased at the fastest rate since August 2020 and this return to growth ended a four-month sequence of decline.’
Investors remain optimistic surrounding the UK’s economic reopening and recovering in the coming months following the first doses of the Moderna vaccine, the third vaccine used in the country, being administered today.
Canadian Dollar (CAD) Loses Traction as Canadian Trade Surplus Falls
The Canadian Dollar has been supported against the Pound for much of the day as the Canadian Dollar’s economic outlook remains bright following the coronavirus pandemic.
However, this afternoon Canada’s trade surplus for February missed forecasts and fell to CA$1.04 billion.
Ryan Brecht, a senior economist at Action Economics commented on the data saying:
‘A disruption in the global supply chain for chips significantly impacted the production of many products, notably motor vehicles as a number of North American plants had to stop production.’
Even more so, Canada continues to struggle with its coronavirus situation, over the weekend Ontario entered a limited lockdown and today Toronto, will cancel all in-person learning at elementary and secondary schools.
The Canadian Dollar has found support in rising oil prices however, following optimism that the global economic recovery will push prices higher.
Pound Canadian Dollar Exchange Rate Outlook: Canadian Employment Data in Focus
For Canadian Dollar investors, key employment data from Canada released on Friday is forecast to increase 85k for March.
If the figure meets forecasts it would signify a second month in a row of growth in Canadian employment and could push the currency higher against its rivals.
For Pound traders tomorrow will see the release of the final construction PMI reading for March from the UK which is expected to show an increase of 1 point.
If the construction PMI meet’s forecasts it would continue the solid overall growth in the sector which could push Sterling higher.