Pound Canadian Dollar Exchange Rate Volatile as Both Currencies Remain Strong
The Pound’s (GBP) strength slipped a little today, and the Pound Canadian Dollar (GBP/CAD) exchange rate has been trending lower again as a result. The Canadian Dollar (CAS) remains appealing on global market sentiment.
After opening last week at the level of 1.7390, GBP/CAD spent the week trending lower before recovering and closing the week close to its opening levels again.
GBP/CAD attempted to climb yesterday and touched a fortnight best of 1.7468 last night. However, today the pair has slipped back and is trending in the region of 1.7384 at the time of writing.
UK PMI data is due tomorrow, and Canadian job market data could influence the Pound Canadian Dollar exchange rate outlook later in the week.
Pound (GBP) Exchange Rate Outlook Remains Optimistic
The Pound has been broadly appealing on expectations for Britain’s economy to be one of the first major economies to recover from the coronavirus pandemic.
This continues to support Sterling this week, though the bullishness around Sterling has been softening somewhat.
Britain’s gradual economic reopening continues as expected. More shops and bars are expected to reopen next week.
The UK government launched its Recovery Loan Scheme today, a less generous loan scheme aimed at attempting to ease businesses away from loan schemes with the economy expected to recover later in the year.
Canadian Dollar (CAD) Exchange Rates Benefit from Market Sentiment
Optimism around the US economic outlook, combined with improving commodity trade performance and overall market sentiment, are leading to Canadian Dollar (CAD) strength today.
As the Canadian Dollar is a currency correlated to risk and trade sentiment, it has benefitted from the improving market sentiment.
Speculation that the Bank of Canada (BoC) could soon soften its bond purchasing scheme also played part in recent Canadian Dollar strength. According to Shaun Osborne, Chief Currency Strategist at Scotiabank, such a move could:
‘balance that out with some sort of dovish messaging that says that rates aren’t going to move up anytime soon’
Pound Canadian Dollar (GBP/CAD) Exchange Rate Outlook Could be Influenced by Upcoming Data
Wednesday will see the publication of Britain’s final March services and composite PMI results. These will give investor a better idea of how Britain’s economy has been performing over the past month as the nation’s lockdown continues its slow reopening.
It will also be the most influential dataset of the week for the Pound. If there are no surprises in UK data, the British currency’s movement will instead focus on Britain’s coronavirus situation.
More influential Canadian data will be published in the coming sessions. Surprising Canadian data could lead to CAD driving GBP/CAD movement instead.
Canadian trade balance data and Ivey PMI results are due tomorrow.
However, Friday’s Canadian job market report could be one of the week’s most influential datasets for the Pound Canadian Dollar (GBP/CAD) exchange rate.