GBP/CAD Exchange Rate Heads Higher as Canadian Manufacturing Sales Fall Below Forecasts
The Pound Canadian Dollar exchange rate rose by 0.2% today despite WTI oil prices climbing above $60 per barrel. The pairing is currently fluctuating around CA$172.
The oil-sensitive Canadian Dollar (CAD) has failed to rise against Sterling today, despite a steady rise in oil prices thanks to a weaker US Dollar influencing commodities.
Giovanni Staunovo, commodity analyst at UBS Group AG, commented:
‘Oil is in wait-and-see mode for the next catalyst. The accelerating pace of vaccination we already see slowly will result in less mobility restrictions and support oil demand and prices.’
In Canadian economic data, today saw the release of February’s latest Manufacturing Sales, which fell below forecasts by -1.6%.
Stephen Brown, senior Canada economist at Capital Economics, was more confident about the outlook for March’s data, however, saying:
‘[M]anufacturing sales should have received a boost in March as the U.S. weather distortion was reversed, and there are signs that demand is continuing to recover.’
As a result, some CAD investors are becoming more concerned about the outlook for the nation’s manufacturing sector.
Pound (GBP) Rises as UK Economic Outlook Continues to Improve
The Pound (GBP) rose against the Canadian Dollar today as the outlook for the UK economy continues to improve.
According to the Office for National Statistics (ONS), restaurant bookings have soared since lockdown restrictions were eased earlier this week.
The ONS commented:
‘On Monday 12 April 2021, estimates for UK seated diner reservations were at 79% of the level seen on the equivalent Monday of 2019, the first time their level has exceeded 2% since before the announcement of the latest lockdown in England on 4 January 2021.
‘This coincides with the easing of lockdown restrictions in England on this day, allowing restaurants to open for outdoor dining. The equivalent figures for London and Manchester were 47% and 153%, respectively.’
UK Covid-19 infection rates are also continuing to fall, with hospitalisations and the death toll also down against last week’s figures.
GBP/CAD Exchange Rate Forecast: Could Rising Oil Prices Boost the ‘Loonie’?
Canadian Dollar (CAD) investors will be awaiting tomorrow’s Canadian Housing Starts data for March.
Any improvement in the outlook for the Canadian economy would boost the CAD/GBP exchange rate.
Oil prices will continue to drive the Canadian Dollar exchange rate, however, so if prices continue to rise, then the ‘Loonie’ will head higher against the Pound.
The Pound Canadian Dollar exchange rate could continue to rise if the outlook for the UK economy improves as Covid-19 infections drop.