Pound Canadian Dollar (GBP/CAD) Exchange Rate Muted despite Strong Wage Growth
The Pound Sterling Canadian Dollar (GBP/CAD) exchange rate remained muted and the pairing is currently trading at an inter-bank rate of CA$1.6255.
Sterling was left muted against the ‘Loonie’ despite data revealing UK wage growth remained strong.
The Office for National Statistics (ONS) said the unemployment rate dipped to 3.8% in July, with the estimated rate of employment remaining at the joint-highest since records began.
A total of 32.78 million people in the UK were in employment.
However, data revealed there had been a cut back in hiring over the three months to July.
While Q2 saw the economy add 115,000 new jobs to the economy, in the three months to July only 31,000 jobs were created.
Commenting on this, chief economist at the Institute of Directors, Tej Parikh noted:
‘For a long time, businesses have been eager to expand their workforce despite difficult economic conditions. With the supply of available workers shrinking and uncertainty lingering, firms are now beginning to dial down their recruitment ambitions.
‘Vacancies are likely to continue falling. It’s becoming harder for business leaders to do any meaningful workforce planning, let alone find the talent that they need. High costs and an unclear view of future revenue have also led some to hold off on new hires.’
Canadian Dollar (CAD) Muted despite Increase in Oil Prices
The oil-sensitive Canadian Dollar was left muted against the Pound despite oil prices rising for the fifth day in a row.
Optimism OPEC and other countries could agree to extend output cuts and support oil prices saw prices rise close to a six-week high.
Prince Adbulaziz bin Salman, Saudi Arabia’s energy minister said the country’s policy wouldn’t change, and a global deal to cut oil production would be maintained.
Commenting on hopes for an extension of the oil production cuts, senior economist at National Australia Bank, Phin Ziebell said:
‘It’s a lot of market movement on some pretty strong speculation […] so maybe people are just excited that the Saudis are being pretty proactive on this front.’
Sterling (GBP) Flat as Parliament Suspended for Five Weeks
The Pound remained under pressure as UK parliament was officially suspended for five weeks.
On Monday, MPs voted against Boris Johnson’s call for snap general election in October for the second time.
Opposition MPs insisted a law blocking a no-deal Brexit would first need to be implemented before they would consider voting for an election.
This prompted the Prime Minister to promise he would secure a Brexit deal at next month’s European Union summit.
Pound Canadian Dollar Outlook: Canadian Housing Data to Buoy CAD?
Looking ahead to this afternoon, the Canadian Dollar (CAD) could edge up against Sterling (GBP) following the release of buildings permits data.
The ‘Loonie’ could receive an upswing of support if the number of building permits granted rises higher than expected in July.
Meanwhile, August’s Canadian housing starts could provide CAD with further support.
If the number of housing starts jumps once again, the Pound Canadian Dollar (GBP/CAD) exchange rate could slump.