Pound Sterling Canadian Dollar (GBP/CAD) Exchange Rate Flat as Johnson Moves to Intensive Care
UPDATE: The Pound Sterling Canadian Dollar (GBP/CAD) exchange rate remained largely flat this morning. This left the pairing trading at around CA$1.7285.
Sterling remained under pressure today after Prime Minister Boris Johnson was moved to intensive care due to worsening coronavirus symptoms.
Downing Street said the PM was still conscious and that he was moved on the advice of his medical team and was receiving ‘excellent care’.
Commenting on these developments, Ilan Solot, an FX strategist at Brown Brothers Harriman noted:
‘If he is impaired from resuming his official duties, then it creates some complications but we have to wait and watch.’
Saudi Arabia-Russia Oil Deal Reports Send the Pound Sterling Canadian Dollar (GBP/CAD) Exchange Rate Lower
The Pound Sterling Canadian Dollar (GBP/CAD) exchange rate slumped by around -0.3% on Monday morning. This left the pairing trading at around CA$1.7372.
The oil-sensitive ‘Loonie’ made gains this morning after reports that Russia and Saudi Arabia are close to reaching a deal on oil production cuts.
After a three-year deal to keep prices stabilised collapsed a month ago, Saudi Arabia and Russia have been blaming each other for the failure to find a compromise during last month’s OPEC+ meeting.
Speaking to CNBC on Monday, head of Russia’s sovereign wealth fund, Kirill Dmitriev said the two sides were ‘very, very close’ to an agreement.
He also added:
‘I think the whole market understands that this deal is important and it will bring lots of stability, so much important stability to the market, and we are very close.’
Sterling (GBP) Falls as UK Construction Sector ‘Stuck in Quicksand’
March’s British construction PMI revealed that construction work plummeted at the fastest rate since April 2009.
Markit found that there were rapid declines in both output and new work last month, while employment fell at the fastest pace since September 2010.
Added to this, business expectations slipped to the weakest since October 2008, dampening Sterling sentiment.
The UK construction PMI fell from February’s 52.6 to 39.3 in March as the coronavirus pandemic throttled demand.
Commenting on this, Duncan Brock, Group Director at the Chartered Institute of Procurement & Supply noted:
‘The battered construction sector was offered a brief respite in February with a marginal rise in output after a difficult year, but any hope of a continuation of growth was mercilessly bulldozed away in March and construction companies registered their lowest levels of optimism since October 2008.
‘With no upturn in sight, and with the fastest level of layoffs since September 2010, the sector is stuck in quicksand and sinking further.’
British Consumer Confidence Suffers Largest Fall in Over 45 Years
Monday saw Sterling suffer losses against the ‘Loonie’ following the release of GfK’s coronavirus ‘flash report’.
Data revealed that British consumer confidence suffered the largest fall in over 45 years as the coronavirus pandemic took hold.
GfK reported the index plummeted to -34 from -9 in their regular March survey. This was also the weakest overall sentiment since February 2009.
Commeting on this morning’s data, client strategy director at GfK, Joe Staton said:
‘Our COVID-19 ‘flash report’ shows a dramatic result with consumer confidence falling off the cliff in the last two weeks of March.’
Pound Canadian Dollar Outlook: BoC’s Business Outlook Survey in Focus
Looking ahead to this afternoon, the Canadian Dollar (CAD) could give up some of its gains against the Pound (GBP) following a survey from the Bank of Canada (BoC).
If this afternoon’s Business Outlook Survey from the country’s central bank paints a bleak picture, ‘Loonie’ sentiment will suffer.
Tuesday could see CAD suffer further losses following the release of March’s Ivey PMI.
If activity plummets in Canada, with the survey falling into contraction territory, the Pound Canadian Dollar (GBP/CAD) exchange rate will edge higher.