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Pound Canadian Dollar Exchange Rate Forecast: Doubts Over UK Reopening Roadmap to Cap Upside in GBP?

GBP/EUR

Pound Canadian Dollar Exchange Rate Subdued on Reopening Concerns 

The Pound Canadian Dollar (GBP/CAD) exchange rate is trending lower this morning, amidst concerns that the UK’s roadmap for reopening the economy could face delays. 

At the time of writing the GBP/CAD exchange rate is trading at around CA$1.7556, down slightly from this morning’s opening rate. 

Pound (GBP) Facing Significant Pressure if Reopening is Delayed 

As the UK embarks on the first stage of Boris Johnson’s reopening plan, with children having gone back to school earlier this week, the Pound (GBP) finds itself facing some headwinds amid concerns about whether the country will be able to stick to the PM’s initial roadmap for lifting restrictions. 

The current plan is for restrictions to be eased in four stages, with a five-week gap between each step to allow experts to access what impact it has had on the infection rate. 

However, the PM as well as the government’s most senior health experts have sought to temper expectations, warning that each step brings risks which could lead to the roadmap being altered. 

Johnson said in a press conference earlier this week: 

‘Of course, there will be a risk of increased transmission, that’s inevitable if you open up schools for millions of kids across the country. That is going to happen.’ 

While recent UK coronavirus statistics show that the number of new cases is continuing to fall, there is also some concern that the rate of decline is slowing, with some regions even showing signs of leveling off. 

Should this push the government into delaying some stages of its reopening plans, we can expect to see the Pound met by some heavy selling pressure in the future. 

Canadian Dollar (CAD) Firms as Oil Ticks Higher Again 

Meanwhile, after coming under pressure on Wednesday following the muted reaction the Bank of Canada’s (BoC) latest rate decision, the Canadian Dollar (CAD) is back on the offensive this morning courtesy of an uptick in oil prices. 

WTI crude has climbed 1.2% so far this morning, propelling it back above $65 a barrel and reflecting well on the commodity-linked ‘Loonie’. 

The rebound in oil prices comes amid rising expectations for a rebound in demand in 2021, as stimulus measures and vaccine rollouts look to help turbocharge the global economic recovery.