GBP/CAD Exchange Rate Falls as ‘Loonie’ Traders Brace for Construction PMI Figures
The Pound Canadian Dollar (GPB/CAD) exchange rate is down today and is currently trading around CA$1.7074 on the interbank market.
The Canadian Dollar (CAD) gained against the Pound (GBP) on rising hopes for the Canadian economy following a boost in house hold spending, which reached a two-year high, and with business investment figures also seeing a boost to a 23-year high.
Avery Shenfield, a Chief Economist at CIBC, commented:
‘Overall, [Canada’s] economy has slid past a near stall in the past two quarters, but the details and progress in March suggest that we’re going to make up for some of that.’
Many ‘Loonie’ traders will be awaiting today’s publication of the Canadian Markit construction PMI figures for May, which are expected to hold steady at 50.5.
Any signs of improvement, however, would likely see CAD rise against Sterling.
GBP/CAD Exchange Rate Falls as UK Manufacturing Slides into Contraction
The Pound weakened following the release of the UK Markit manufacturing PMI figures for May, which slid into contraction at 49.4.
Duncan Brock, a Group Director at the Chartered Institute of Procurement and Supply, remained downbeat, saying:
‘A slowdown in the global economy, and trade wars hotting up could tip the scales even further next month and increase the likelihood that the UK manufacturing sector will remain in contraction territory.’
US President Donald Trump has landed in the UK today for a state visit, and this is occupying headlines, and diverting attention from UK’s own political matters.
But as Brexit uncertainty continues, along with a question mark hanging over the next leader of the Conservative Party, many Sterling traders are remaining cautious.
Fears of a no-deal emerging between the EU and the UK were heightened following the Foreign Secretary, Jeremy Hunt’s, comments that he would back a no-deal Brexit ‘with heavy heart’.
Mr Hunt said:
‘I would be prepared to do it in extremis. But I wouldn’t do it if there was a prospect of a better deal. And I think there is a prospect of a better deal, and I think it’s possible to get one before 31 October, although I don’t pretend it’s going to be easy.’
GBP/CAD Outlook: Brexit Developments to Remain in Focus
Pound traders will be looking ahead to Tuesday’s UK Markit construction PMI figures for May, which are expected to hold steady at 50.5.
Tomorrow will also see the UK BRC like-for-like retail sales figures for May, which are expected to ease.
‘Loonie’ traders, meanwhile, will be focusing on global economic developments, with the Canadian especially sensitive to trade tensions between the US and China, as its economy relying heavily on international trade.
The Pound Canadian Dollar exchange rate will be driven by Brexit developments, which will become increasingly intense in coming week as the UK faces political uncertainty over the future leader of the Conservative Party.