GBP/CAD Exchange Rate Steady as UK GDP Prints in Line With Expectations
The Pound Canadian Dollar (GBP/CAD) exchange rate is trading in a narrow range today as markets react to the UK’s latest GDP figures.
At the time of writing the GBP/CAD exchange rate is virtually unchanged from today’s opening rate, leaving the pairing trading at CA$1.6370.
Pound (GBP) Stable as UK GDP Rallies
Trade in the Pound (GBP) was mostly steady today as GBP investors welcomed the release of the UK’s latest monthly GDP release.
According to data published by the Office for National Statistics (ONS), the UK economy returned to growth in May, expanding by 0.3% after a previous contraction of 0.4% in April.
The ONS attributed the rebound in growth to a partial recovery in car production, factories began to re-open after being closed earlier in the year in preparation for the original Brexit deadline.
However the figures were not enough to alleviate concerns that the UK economy is set to contract in the second quarter, following some gloom PMI data in June which indicated the UK’s private sector slumped last month.
Canadian Dollar (CAD) Steady as Oil Prices Jump
Meanwhile, the Canadian Dollar has been able to shrug off attempts by the Pound (GBP) to advance today as the oil-sensitive ‘Loonie’ is buoyed by a sharp uptick in crude prices.
Brent Crude leapt over 2% to $65 a barrel on Wednesday as US stockpiles were reported to have slumped more than expected in the week ending 4 July, with a fall of 8 million barrels against the 3 million drop that had been forecast.
With crude oil being Canada’s single largest export, the jump unsurprisingly reflected well on CAD exchange rates.
GBP/CAD Exchange Rate Forecast: Neutral BoC Outlook to Boost the ‘Loonie’?
Coming up later this afternoon we have the Bank of Canada’s (BoC) latest interest rate decision, which could prompt some movement in the Pound Canadian Dollar (GBP/CAD) exchange rate.
No policy changes are expected from the BoC this month, with the bank widely expected to stick to its neutral outlook on monetary policy.
However at a time when every other central bank appears to be undergoing a dovish shift, this commitment to hold steady may be interpreted as hawkish in comparison, potentially boosting the appeal of the ‘Loonie’.