GBP/CAD Exchange Rate Rangebound, Canadian Manufacturing PMI Improves
The Pound Canadian Dollar (GBP/CAD) exchange rate held steady today, with the pairing currently trading around CA$ 1.718 after Canada’s Markit manufacturing PMI for November expanded at its fastest pace in nine months.
Tim Moore, Economists Associate Director at IHS Markit, commented:
‘The manufacturing sector has started to find its feet again after a soft patch during the third quarter of the year. November data reveals another modest recovery in manufacturing performance, led by faster growth among consumer goods producers.’
However, the ‘Loonie’ failed to gain against the Pound due to growing concerns that US-China trade relations could once again flare-up, jeopardising the possibility of a ‘phase one’ trade deal by the end of this year and threatening global economic growth.
This follows China’s suspension of US Navy visits to Hong Kong following US President Donald Trump’s signing into law a HK Bill, which has been heavily criticised by Beijing as a means for Washington to meddle in Chinese affairs.
Hua Chunying, Chinese Ministry spokeswoman commented:
‘We urge the US to correct the mistakes and stop interfering in our internal affairs. China will take further steps if necessary to uphold Hong Kong’s stability and prosperity and China’s sovereignty.’
GBP/CAD Exchange Rate Holds Steady as UK Manufacturing PMI Contracts
The Pound (GBP) held steady against the Canadian Dollar (CAD) following this morning’s release of the UK Markit manufacturing PMI, which contracted for its seventh month in a row at 48.9.
Duncan Brock, Group Director at the Chartered Institute of Procurement and Supply, was downbeat in his analysis, commenting:
‘A heavy sense of inevitability hung around the sector in November as it continued to suffer the effects of a lethal cocktail of Brexit uncertainty, slowing global growth and an impending General Election. These combined to stifle any chance of manufacturing crawling out of the contraction zone, where the sector was stuck for a seventh month in a row.’
UK political developments have remained in focus, however, with this week being the penultimate week before the 12th December general election.
Pound investors are becoming increasingly jittery, however, as the Labour Party continues to narrow its gap with the Conservatives in the opinion polls, threatening a possible hung parliament in just under a fortnight.
GBP/CAD Outlook: Could Dovish BoC Commentary Weaken the ‘Loonie’?
Sterling investors will be looking ahead to tomorrow’s release of November’s UK BRC Like-For-Like retail sales figure, which is expected to ease at -1.7% on the year.
Canadian Dollar traders will be looking further ahead to Wednesday’s interest rate decision from the Bank of Canada (BoC), which is expected to remain unmoved at 1.75%.
Any dovish comments about the Canadian economy, or ongoing fears concerning global economic growth, however, could see the GBP/CAD exchange rate begin to improve.
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