April 8, 2021 – Written by John Cameron
GBP/CAD Exchange Rate Falls as Outlook for Canadian Economy Improves
The Pound Canadian Dollar (GBP/CAD) exchange rate fell today following a surge in the latest Canadian Ivey PMI data for March, which beat forecasts and rose to 72.9. The pairing is currently fluctuating around CA$ 1.73.
The Canadian Dollar (CAD) has benefited from the Ivey PMI jumping to a 10-year high as this indicates a rebounding economy.
Analysts at Reuters commented on the data:
‘The seasonally adjusted index rose to 72.9 from 60.0 in February, surpassing analysts’ expectations for 60.5. It was the highest level for the index since March 2011 and the second highest since the PMI was launched in 2000.’
‘The Ivey PMI measures the month-to-month variation in economic activity as indicated by a panel of purchasing managers in the public and private sectors from across Canada. A reading above 50 indicates an increase in activity.’
The oil-sensitive ‘Loonie’ is also benefiting from rising oil prices as demand continues to increase due to an improving outlook for the global economy.
Long-term bullish potential in the oil market is also propping up confidence in the Canadian economy and benefiting the CAD/GBP exchange rate.
Pound (GBP) Struggles Despite Strong UK Construction PMI
The Pound (GBP) failed to rise against the ‘Loonie’ despite the latest UK Construction PMI beating forecasts and rising to a six-year high.
The figure exceeded consensus and rose from 53.3 to 61.7 last month.
Duncan Brock, the Group Director at the Chartered Institute of Procurement and Supply, commented:
‘Construction was full of the joys of spring in March with a sudden leap into solid growth fuelled by across-the-board rises in workloads in all sectors. The commercial pipeline was particularly spectacular giving its best performance since late-2014.’
UK markets are becoming more confident about the outlook for the nation’s economy, especially now that lockdown restrictions will be further eased on 12th April.
However, GBP investors are becoming concerned over the recent news about the Oxford AstraZeneca vaccine following reports of rare blood clotting cases.
With confidence in the vaccine being hit by the reports, UK markets are concerned that it could have negative backlash on the rollouts among those below the age of 30.
GBP/CAD Exchange Rate Forecast: Could Rising Oil Prices Boost the Canadian Dollar?
Pound (GBP) investors will be awaiting tomorrow’s release of the latest Halifax House Prices figure for March.
Any improvement in the outlook for the British economy would boost the GBP/CAD exchange rate.
Canadian Dollar (CAD) traders will be monitoring tomorrow’s release of the Canadian Unemployment Rate report for March.
If Canada’s unemployment level continues to rise, however, then we could see the ‘Loonie’ begin to fall.
The Pound Canadian Dollar exchange rate will remain sensitive to oil prices this week. Any signs of oil prices rising would drive up the oil-sensitive CAD.
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TAGS: Canadian Dollar Forecasts Pound Canadian Dollar Forecasts