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Pound to Canadian Dollar (GBP/CAD) Exchange Rate Sinks as Hopes Grow for Oil-Sensitive Canadian Economy

Canadian Dollar Currency Forecast

GBP/CAD Exchange Rate Falls as US President Donald Trump’s Health Improves

The Pound to Canadian Dollar (GBP/CAD) exchange rate fell by -0.2% today, with the pairing currently trading around CA$1.719.

The Canadian Dollar (CAD) rose today following an improvement in risk-appetite as expectations grew over the strength of economic recovery.

The oil-sensitive ‘Loonie’ has benefited from news that US President Donald Trump’s health had improved, bringing relief to markets.

US House Speaker Nancy Pelosi also said that progress towards fiscal stimulus had been made, further buoying appetite for risky assets like the Canadian Dollar.

CIBC Chief Economist Avery Shefeld was less optimistic, however, saying:

‘Easing up on COVID-19 restraints fed into solid Canadian GDP gains in July and August, but the concerns now are whether we will pay for some of that greater openness.’

In Canadian economic data, today will see the release of the latest International Merchandise Trade report for August.

Any significant improvement in Canada’s trade-reliant economy would boost the ‘Loonie’.

Pound (GBP) Falls despite Renewed Hopes of a Brexit Trade Deal

The Pound (GBP) failed to gain today on renewed hopes that the limited time to secure a post-Brexit trade deal could intensify trade negotiations between the UK and the EU.

As a result, GBP investors are hopeful that Downing Street will compromise and seal a deal by the end of October.

Last week saw Angela Merkel, the Chancellor of Germany, say that London remains on a ‘constructive path’.

Goldman Sachs also commented on the ‘latest smoke signals’ which indicate that the UK and the EU could be on the ground for a post-Brexit trade deal.

In UK economic news, today saw the release of the final UK Construction PMI for September. The figure beat forecasts and rose to 56.8, sparking off renewed confidence in Britain’s construction sector.

Duncan Brock, the Group Director at the Chartered Institute of Procurement and Supply, commented:

‘UK Construction took off in September, soaring ahead of both the manufacturing and service sectors in terms of output growth and recording the fastest rise in purchasing activity since October 2015.’

GBP/CAD Outlook: Could Dampening Risk Sentiment Drag Down the ‘Loonie’?

The Canadian Dollar (CAD) will remain sensitive to global risk sentiment this week.

Any further signs of rising Covid-19 cases derailing some of the world’s largest economies would prove CAD-negative. Pound (GBP) traders will be looking ahead to tomorrow’s release of September’s UK Halifax House Prices.

Any improvement in the British economy would prove GBP-positive.

However, Brexit will continue to drive the GBP/CAD exchange rate this week. As a result, we could see Sterling continue to head higher if markets become more optimistic about a post-Brexit trade deal.

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