Pound to Canadian Dollar Exchange Rate Already Sliding This Week
The Pound (GBP) continues to be driven by strength in rival currencies so far this week, and the Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate is already trending lower. While the pair rebounded from last week’s lows, it remains under pressure.
Last week saw GBP/CAD’s second consecutive week of losses. After opening the week at the level of 1.7472, GBP/CAD spent the week trending with a downside bias.
Towards the end of the week, GBP/CAD even trended near an August low of 1.7249. While GBP/CAD rebounded before markets closed, it was unable to mount much of a recovery and closed the week low at the level of 1.7362.
What’s more, GBP/CAD is already trending with a downside bias this week. At the time of writing, GBP/CAD is trending near the level of 1.7328.
Pound (GBP) Exchange Rates Lack Appeal as UK Coronavirus Outlook Gloomy
Sterling’s movement remains mixed today, amid a lack of solid support for the British currency lately.
As Britain’s coronavirus situation remains full of uncertainties and poor domestic data, the British currency remains unappealing.
Today’s UK Household Financial Index data from IHS Markit revealed that UK households were seeing more contraction in financial health despite the coronavirus lockdown being eased.
On top of this, Pound investors are still anxious about the Brexit process ahead of upcoming UK-EU Brexit negotiations this week.
Canadian Dollar (CAD) Exchange Rates Remain Appealing after Last Week’s Market News
The recently volatile Canadian Dollar (CAD) has seen a rebound in demand over the past week or so.
Investors have been buying the Canadian Dollar back from its cheapest levels, thanks to some optimistic developments in global markets as well as strong Canadian data.
Coronavirus vaccine hopes, combined with higher commodity prices in global markets, helped the Canadian Dollar to sustain some recovery.
According to Michael Goshko, Corporate Risk Manager at Western Union Business Solutions:
‘Stronger commodity prices for Canadian exports creates greater external demand for the (Canadian) Dollar’
CAD strength was further boosted by Canadian manufacturing data published at the end of last week, which came in much stronger than expected.
Pound to Canadian Dollar (GBP/CAD) Exchange Rate Awaits Brexit and Oil Price News
The Pound to Canadian Dollar exchange rate may have further to fall this week, unless the Pound experiences a rebound in demand on Brexit developments.
The latest round of UK-EU Brexit negotiations is set to begin tomorrow. They will go on for the majority of the week.
No huge developments are expected in these talks, but as 2020 draws closer to an end there is rising concern about the possibility of a no-deal outcome.
According to Jane Foley, Senior FX Strategist at Rabobank:
‘If it becomes clearer that a deal won’t be had – or if there could be maybe a broad deal but there are lots of sectors of the economy in the UK that are unhappy about that – then I think Sterling could still be vulnerable on that front too,’
Beyond potential Brexit developments, investors will also be keeping an eye for shifts in oil markets.
If oil prices continue to rise, the Canadian Dollar’s rebound is more likely to be extended.
UK and Canadian inflation rate data, due for publication on Wednesday, could also influence the Pound to Canadian Dollar (GBP/CAD) exchange rate if it surprises.