Currency News

Daily Exchange Rate Forecasts & Currency News

Pound Canadian Dollar (GBP CAD) Exchange Rate Tumbles as Canadian Unemployment Plummets

December 1, 2017 - Written by Frank Davies

The Pound Canadian Dollar exchange rate fell almost 1.5% today as markets were surprised by better-than-expected Canadian unemployment figures and GDP.

Canadian Data Proves Robust, CAD Exchange Rates Soar



The Canadian economy expanded at an annualised rate of 1.7% in Q3 2017, admittedly down from the previous robust reading of 4.3% but better than the 1.6% that economists had forecast.

In other news investors were pleased to hear that unemployment in Canada plummeted to a near 10-year low in November by printing at 5.9%, significantly down from the previous period’s 6.3% as the economy added some 80,000 jobs.

This figure easily beat the market expectation of 10,000 new jobs and helped ease market concerns regarding the extent of Canada’s second half slowdown, with some worried that the decline might be severe.

Nick Exarhos, Economist at CIBC Economics shared his thoughts on the figures:

‘All told, some great numbers on the monthly GDP front and on jobs, which should support the Loonie and dent fixed income’.

The increased employment will perceivably help fuel household spending and, in turn, economic growth, an outlook that drove a huge amount of demand back to the ‘Loonie’.

GBP Exchange Rate Encumbered by Latest Gloomy Brexit Outlook



The Pound stumbled into familiar territory on Friday after the release of a particularly gloomy report from the Committee for Exiting the EU.

The committee, made up of various influential MP’s that scrutinise the Brexit progress, asserted early on Friday that it is not possible to see how the issue can be resolved, with no apparent way of reconciling these positions.

Countering these claims, however, were new comments in the afternoon from Ireland’s Deputy Prime Minister Simon Coveney, who asserted that a Brexit deal on the Irish border question is ‘doable’.
Coveney stated:

‘I think it is doable… We are not where we need to be today, but I think it is possible to get to be where we need to be in the next few days’.

He also added that Ireland needed to demonstrate ‘some movement and more flexibility than we have seen to date’.

Despite this outlook from Coveney the markets remained unconvinced and once again apprehensive that ‘sufficient progress’ will be made by Monday for UK Prime Minister Theresa May’s meeting with Jean-Claude Juncker (President of the European Commission).

In slightly better news manufacturing in the UK demonstrated its strongest growth in four years, leaping from 56.6 to 58.2, according to IHS Markit’s November PMI.

The rate of growth for new orders, hiring and output all climbed, with new orders for investment goods growing at the fastest rate since August 1994.

Nonetheless, the wider problems for the UK economy negated this news and left the Pound floundering.

GBP CAD Forecast: Key Brexit Dates in the Weeks Ahead



The market focus for the Pound will likely remain heavily focused on Brexit negotiations, with the next few weeks liable to cause a great deal of volatility.

On the coming Monday Theresa May is expected to meet with Juncker and present London’s position on key aspects like the Irish border, the Brexit divorce sum and the rights of EU citizens after Brexit.

If London and Brussels cannot agree that ‘sufficient progress’ has been made to warrant the beginning of trade talks then things will have to be delayed even longer, an eventuality that will seriously curb demand for the Pound.

Conversely, progression onto the next phase – to be announced at the Brexit summit on the 14th and 15th of December will alleviate a massive amount of pressure on the currency, most likely allowing GBP CAD to return to the Pound’s favour.

Like this piece? Please share with your friends and colleagues:

International Money Transfer? Ask our resident FX expert a money transfer question or try John's new, free, no-obligation personal service! ,where he helps every step of the way, ensuring you get the best exchange rates on your currency requirements.


TAGS: Canadian Dollar Forecasts Currency Predictions

Comments are currrently disabled