GBP/CAD Exchange Rate Edges Higher despite Growing Optimism for Canada’s Economic Recovery
The Pound to Canadian Dollar (GBP/CAD) exchange rate rose by 0.2% today, with the pairing currently fluctuating around $1.736.
The Canadian Dollar (CAD) struggled today following an update from Desjardins Bank. The bank said that the ‘Loonie’ would struggle for the rest of 2020, but would likely recover next year.
François Dupuis, the Vice-President and Chief Economist at Desjardins Bank, was optimistic about Canada’s economy, saying:
‘The economic recovery also seems to be well underway in Canada. The comeback in certain commodity prices is another good thing for the ‘Loonie’. However, the Bank of Canada (BoC) seems to want to maintain a high degree of intervention over the long term, which could rein in the ‘Loonie’s gains against other currencies.’
Many analysts concerned that the BoC will retain its dovish policies. As a result, the outlook for the ‘Loonie’ remains downbeat in the short-term.
Today will see the release of the Canadian GDP figure for Q2, which is expected to plummet to record lows of -39.6%. As a result, we could see the CAD/GBP exchange rate sink deeper.
Pound (GBP) Rises as Officer Works Can Return to Work in England according to UK Transport Minister
The Pound (GBP) edged higher today after the UK transport minister, Gran Shapps, has insisted that it is safe for people to return to work in offices in England.
Mr Shapps commented:
‘The vast majority of employers just want to get their businesses back up and running, they want to do the right thing, and many will have found that actually home working can work for some of their employees.’
Sterling has benefited from comments from the UK’s Chief Negotiator, David Frost. Mr Frost said he is aiming to secure a draft of a post-Brexit free-trade agreement with the European Union by the end of September.
In other UK economic news, today will see the Bank of England’s (BoE) Governor Andrew Bailey deliver a speech. As a result, we could see Sterling sink if Mr Bailey takes a notably dovish stance on Britain’s economic performance going forward.
GBP/CAD Forecast: Could Rising Oil Prices Boost the Canadian Dollar Next Week?
Canadian Dollar (CAD) investors will be looking ahead to Monday’s release of July’s building permits figure for July. If this confirms consensus, then we could see the ‘Loonie’ suffer as concerns grow over Canada’s economy.
Sterling traders will be awaiting Tuesday’s publication of August’s UK marketing PMI, forecast to hold at 55.3. However, any improvement in the UK manufacturing sector would prove GBP-positive.
The GBP/CAD exchange rate will be driven by oil prices next week. Any signs of an increase in oil prices would buoy optimism in Canada’s oil-reliant economy and increase the value of the Canadian Dollar.