June 10, 2019 - Written by John Cameron
STORY LINK Pound Sterling Canadian Dollar (GBP/CAD) Exchange Rate Falls as Brexit Uncertainty Hurts UK Economic Growth
Pound Canadian Dollar (GBP/CAD) Exchange Rate Slumps as UK Manufacturing Falls to 17-Year Low
The Pound Sterling Canadian Dollar (GBP/CAD) exchange rate slumped and the pairing is currently trading at an inter-bank rate of CA$1.6814.
On Monday morning, data revealed that Brexit uncertainty hurt UK economic growth as April’s GDP slumped by -0.4%.
In the three months to April, the UK economy expanded by 0.3% which likely dampened sentiment in Sterling.
Meanwhile, further data from the Office for National Statistics (ONS) showed that the UK’s car manufacturing sector fell by 24% in April thanks to Brexit car factory shutdowns.
This dragged down overall manufacturing by close to 4%, which is the largest slump since June 2002.
Added to this, think tank, NIESR warned that the UK economy may shrink by -0.2% in the second quarter.
This likely dampened sentiment in Sterling as the currency slumped against the Canadian Dollar.
Canadian Dollar (CAD) Rises as Canadian Building Permits Jump to Three-Year High
On Monday afternoon, data revealed that May’s seasonally adjusted housing starts fell in May compared to the previous month.
Housing starts fell from April’s downwardly revised 233,400 to 202,300 which likely dampened sentiment in the ‘Loonie’.
Meanwhile, further data showed that the number of Canadian building permits given for new construction projects jumped by a higher-than-forecast 14.7%.
This was the highest rise in permits since February 2016.
It also came after an upwardly revised 2.8% increase in permits in April which likely buoyed the Canadian Dollar against Sterling.
Sterling (GBP) Slides as Tory Leadership Contest Heats Up
Meanwhile, Sterling slumped thanks to the start of the parliamentary contest to replace Theresa May as Prime Minister.
According to reports, analysts have said it is expected that the Pound will suffer from further losses as investors await the outcome of the contest.
The nomination of front-runner, Boris Johnson likely dampened sentiment in Sterling as he is a prominent Eurosceptic which increases the risk of a no-deal Brexit.
Pound Canadian Dollar Outlook: Will Disappointing UK Unemployment Data Weigh on GBP?
Looking ahead to Tuesday, the Pound (GBP) could rise against the Canadian Dollar (CAD) following the release of the UK average earnings data.
If average earnings rise higher than forecast in the three months leading to April, the Pound could rise.
Meanwhile, any gains in Sterling could be offset by a higher than expected UK unemployment rate.
If UK unemployment edges up from last month’s 45 year low, the Pound Sterling Canadian Dollar (GBP/CAD) exchange rate could slump.
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TAGS: Pound Canadian Dollar Forecasts