Pound Canadian Dollar Exchange Rate Climbs on Canadian Dollar Losses
Despite a dire growth rate for Britain in 2020, the Pound Canadian Dollar (GBP/CAD) exchange rate continues to trend with a bullish streak towards the end of the week. The Canadian Dollar’s (CAD) weakness is making it easier for Sterling (GBP) to stay resilient.
Since opening this week at the level of 1.7520, GBP/CAD has been trending with a largely upside bias. In the middle of the week, GBP/CAD even touched on a February high of 1.7587.
While GBP/CAD has been struggling to hold those highs since, the pair is still on track to sustain gains this week overall. At the time of writing on Friday, GBP/CAD is trending in the region of 1.7566.
More influential data, including retail sales stats, will drive the Pound to Canadian Dollar exchange rate outlook next week.
Pound (GBP) Exhange Rates Resilient despite Worst GDP in 300 Years
Today’s UK growth rate report indicated that Britain’s economy saw a contraction of –9.9% throughout 2020. This made it the worst contraction on record since Britain’s economy shrunk 13% in 1709.
Despite this shocking statistic though, the Pound has actually been fairly resilient against some major rivals this week. This is partially because Britain’s growth was actually not as bad as expected in Q4 2020.
Overall, markets still expect Britain’s economy to be one of the first major economies to recover from the pandemic as the nation’s vaccination schemes are ahead of other major economies.
Canadian Dollar (CAD) Exchange Rates Weighed by Oil Prices and US Economic Hopes
The Canadian Dollar’s resilience on oil prices has softened over the past session, as prices of the commodity finally fall back from highs.
Oil is Canada’s biggest export, so CAD movement is often correlated to oil prices. However, oil producers in OPEC lowered its oil price forecasts due to fresh lockdowns and coronavirus strains.
This has caused oil to see some of its biggest losses in weeks, and this is weighing on the Canadian Dollar.
Investors are also hesitant to buy the Canadian Dollar due to speculation that the US economy could recover from the coronavirus pandemic before Canada’s.
Pound Canadian Dollar (GBP/CAD) Exchange Rate Outlook Could be Influenced by Retail Results
Next week’s economic calendar is looking a little busier, especially for Canadian news. This means the Canadian Dollar could be influenced more by data over the coming week.
After the past week’s quiet Canadian economic calendar, the Canadian Dollar has been driven largely by market sentiment. However upcoming Canadian data is likely to be quite influential.
Monday will see the publication of Canada’s December manufacturing sales results. Housing starts from January will be published on Tuesday.
Then, Canadian inflation is due on Wednesday, ADP employment data on Thursday and retail sales results are due on Friday.
The retail report could be particularly influential as it will give markets a better idea of how Canada’s economic activity held up in December.
Also likely to be highly influential are Britain’s own retail sales results from January, also due Friday. UK PMI projections next Friday will give markets an even better idea of Britain’s economic health.
With these stats on the way and the coronavirus pandemic always developing, there will be plenty for the Pound Canadian Dollar (GBP/CAD) exchange rate to react to next week.