Currency News

Daily Exchange Rate Forecasts & Currency News

Pound Sterling Canadian Dollar (GBP/CAD) Exchange Rate Holds Ground in spite of Weak Household Confidence

February 18, 2019 - Written by Frank Davies

Weakening UK Household Confidence Fails to Dent Pound Sterling Canadian Dollar (GBP/CAD) Exchange Rate



The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate remained on a steady footing on Monday, even as Markit’s household finance index fell to an eleven-month low.

Although confidence among UK households continued to sour this was not enough to drag the Pound down against its rivals, even though sentiment looks likely to deteriorate further.

While Brexit-based uncertainty still hangs over the outlook of the UK economy GBP exchange rates recovered some of their lost ground, shaking off lingering market worries.

The announcement that seven Labour MPs had split away from the party failed to put any particular dampener on the Pound, in spite of this latest division reducing Theresa May’s ability to achieve a consensus.

Canadian Dollar (CAD) Exchange Rates Fail to Capitalise on Oil Price Uptick



Oil prices saw an improvement at the start of the week, meanwhile, as market risk appetite picked up.

With US and Chinese officials sounding positive notes ahead of the latest round of trade talks investors were encouraged to bet that the two sides could avoid the imposition of additional tariffs.

Advertisement
Although Brent crude was trending comfortably above US$66 per barrel, however, the Canadian Dollar was unable to gain traction against the Pound.

As confidence in the outlook of the global economy remains muted the upside potential of CAD exchange rates proved limited.

Stronger UK Wage Growth to Boost GBP/CAD Exchange Rate



Demand for the Pound could pick up further on Tuesday if UK average weekly earnings accelerate in the three months to December as forecast.

Confirmation that wages continued to outpace inflation by a solid margin should bolster confidence in the health of the UK economy, even in the face of Brexit uncertainty.

As higher wages could help to fuel consumer spending, and economic activity on the whole by extension, a stronger showing here would bode well for the first quarter gross domestic product.

On the other hand, if the labour market fails to show fresh signs of tightening this could weigh heavily on GBP exchange rates.

With the Bank of England (BoE) looking set to leave interest rates on hold for the near future any positive boost to the Pound could prove short-lived, however.

BOC Dovishness Forecast to Weigh on Canadian Dollar (CAD) Exchange Rates



Comments from Bank of Canada (BOC) Governor Stephen Poloz could put additional pressure on the Canadian Dollar this week, meanwhile.

Any signs that the BOC is more likely to leave interest rates on hold, or potentially cut them, in 2019 would leave CAD exchange rates exposed to a fresh bout of selling.

Fresh signs of caution over the outlook of the Canadian economy could also weigh heavily on the Canadian Dollar, to the benefit of the GBP/CAD exchange rate.

If oil markets take a turn towards bearishness this could give the GBP/CAD exchange rate an additional rallying point in the days ahead.
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: Pound Canadian Dollar Forecasts

Comments are currrently disabled