Last week, the Pound (GBP) opened trading against the Canadian Dollar (CAD) at a level of CA$ 1.6776 on Monday.
Pound Sterling quickly fell in the pairing to a low of CA$ 1.6597, which was the lowest exchange rate since October 2017.
While it didn’t put the Pound back up to its best exchange rate of the week, Sterling later staged a recovery and rose to close weekly trading at CA$ 1.6681.
Pound Sterling to Canadian Dollar (GBP/CAD) Exchange Rate Rises on Reduced Brexit Fears
The Pound (GBP) has advanced against the Canadian Dollar (CAD) today, hitting an exchange rate of CA$ 1.6687.
This appreciation has ironically been caused by a shortage of UK data – with no warnings about the consequences of a no-deal Brexit so far, GBP trader confidence has risen.
There has been UK economic news to speak of today, but it hasn’t contributed to the recent GBP/CAD exchange rate rise.
This has been the Institute of Directors report on UK business confidence – a -16% drop in UK business leader confidence levels has been recorded in the latest survey.
Surveyed respondents are reportedly concerned about how the difficulties of UK-EU trading after Brexit, but this news hasn’t been enough to cause GBP/CAD exchange rate losses.
Elaborating on the IoD statistics, company Chief Economist Tej Parikh said:
‘Despite cautious optimism emerging amongst the business community earlier in the year, any momentum appears to have dwindled.
‘We’re heading back to the levels of pessimism we saw before progress was made on phase one of Brexit talks.’
Canadian Dollar to Pound Sterling (CAD/GBP) Exchange Rate Drops on Oil Price Upset
On the other side of the pairing, the Canadian Dollar to Pound (CAD/GBP) exchange rate has fallen today because of concerns about the future price of crude oil.
A recent dip in crude prices is being blamed on continuing uncertainty about whether global economic growth will be harmed by US trade tariff activities.
Although future US sanctions on Iranian crude oil exports could boost oil prices in the future, these measures will not go into effect until November.
Highlighting the potential for a commodities market-wide shift from these future sanctions, analysts at JBC Energy said:
‘We continue to believe that despite all of the political goodwill that may exist in Europe, there is no practical way that many of the sizeable European buyers of Iranian crude can be protected from US sanctions.’
Pound Sterling to Canadian Dollar Exchange Rate Forecast: Are GBP/CAD Losses ahead on UK Borrowing Data?
The Pound’s (GBP) slight advance against the Canadian Dollar (CAD) today could give way to losses in the near-future, when UK borrowing and industrial orders data comes out on Tuesday.
Taking these in order, the UK government borrowing reading for July is expected to show a reduction in June’s deficit, but potentially not to the point of a surplus.
Such a result might raise GBP trader confidence, but the later Confederation of British Industry (CBI) industrial orders stats could reduce demand for Pound Sterling.
The CBI figure is predicted to show a reduction in reported industrial orders, with a shift from 11 points to 9.
Any positive reading means overall industrial sector growth, but a slowdown could still unsettle GBP traders and weaken the Pound to Canadian Dollar exchange rate.
The CBI’s industrial output reading previously showed 13 points in June, but has steadily fallen since then.
There will also be Canadian economic data out on Tuesday, consisting of the afternoon’s wholesale sales reading for June.
This is expected to show a minor slowdown in the pace of sales activity, with a shift from 1.2% to 0.8%.
Beyond Tuesday’s data releases, the Pound to Canadian Dollar exchange rate could recover on Wednesday if the afternoon’s Canadian retail sales figures decline as forecast.
The pace of annual Canadian sales growth is tipped to remain at 3.6%, but June’s monthly sales readings with and without automobiles included are expected to slow to 0.1%.
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