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Pound Canadian Dollar (GBP/CAD) Exchange Rate Eases as Canadian Traders Optimistic Ahead of BoC Rate Decision

July 9, 2019 - Written by John Cameron

GBP/CAD Exchange Rate Sinks as Canadian Dollar in ‘Resilient Pocket’

The Pound Canadian Dollar (GBP/CAD) exchange rate eased by 0.2% this morning, with the pairing fluctuating around CA$1.637.

The Canadian Dollar (CAD) edged higher against the Pound (GBP) as economists are becoming optimistic that the Bank of Canada (BoC) may hold back on any easing trends from the US Federal Reserve, leaving policy on hold indefinitely.

Frances Donald, a Chief Economist at Manulife Investment Management, commented:

‘We’re in what I’m going to call a resilient pocket where Canada can look a lot better than the rest of the world, at least in the foreseeable future.’

However, rising concerns over the weakening global economy are preventing the ‘Loonie’ from making any major gains, as businesses suffer from falling investment and exports, dampening hopes of any mid-term growth forecasts.

GBP/CAD Exchange Rate Falls as UK Retail Sales Fall to Record Lows

The Pound, meanwhile, fail to gain following today’s publication of the annual BRC like-for-like retail sales figures for June.

These eased by -1.6% despite the forecast 0.8%, and hitting record lows since the mid-1990s.

BRC Chief Executive Helen Dickinson was downbeat, saying:

‘Overall, the picture is bleak: rising real wages have failed to translate into higher spending as ongoing Brexit uncertainty led consumers to put off non-essential purchases.’

US-UK relations have also soured following a leak this weekend which showed that the British ambassador to Washington, Sir Kim Darroch, had called President Donald Trump ‘inept’ and ‘dysfunctional’.

Mr Trump hit back, tweeting:

‘I do not know the Ambassador, but he is not liked or well thought of within the U.S. We will no longer deal with him.’

This has caused concern for Sterling traders as difficulties will now increase for the next Prime Minister, as US-UK tensions are likely to cause a problem for post-Brexit trade discussions.

GBP/CAD Forecast: Sterling Could Rise on Improved Growth Figures

Canadian Dollar traders will be looking ahead to tomorrow’s BoC interest rate decision, which is expected to hold at 1.75%.

Any bullish comments during the rate statement, however, could buoy the CAD/GBP exchange rate higher.

Sterling investors, meanwhile, will be awaiting tomorrow’s manufacturing figures for May.

If these meet their forecast improvements, we could see the Pound begin to claw back some of its losses.

Tomorrow will also see the UK GDP figures for May, which are expected to rise from 0.4% to 0.3%.

The GBP/CAD exchange rate could edge higher tomorrow if UK economic data confirms its positive consensus.

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TAGS: Canadian Dollar Forecasts Pound Canadian Dollar Forecasts

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