Failed Coronavirus Vaccine Trial Leaves Pound Canadian Dollar (GBP/CAD) Exchange Rate Flat

April 24, 2020 - Written by John Cameron

STORY LINK Failed Coronavirus Vaccine Trial Leaves Pound Canadian Dollar (GBP/CAD) Exchange Rate Flat

Pound Sterling Canadian Dollar (GBP/CAD) Exchange Rate Muted as Oil Prices Rise

The Pound Sterling Canadian Dollar (GBP/CAD) exchange rate remained largely flat this morning, leaving the pairing trading at around CA$1.7347.

The Canadian Dollar remained flat against the Pound today after news of a failed coronavirus vaccine trial dampened market sentiment.

Meanwhile, on Friday oil prices rose and added to gains from previous sessions following statements about production cuts from producers such as Kuwait.

Added to this, the United States approved another package to help cope with the coronavirus turmoil on the economy.

US legislators approved a nearly $500 billion relief bill, which would provide some support to small businesses and hospitals, pushing spending up to nearly $3 trillion.

Although, despite Brent crude oil jumping 20% in the previous session, prices were still headed towards the eighth weekly loss in the last nine weeks.

Added to this, a Reuters poll suggested the global economy is likely to see a record contraction in 2020.

Commenting on this, economists from Capital Economics wrote in a note:

‘The disruption relating to the coronavirus is set to cause the steepest fall in global GDP since the Second World War. Once the virus is under control, [economic] output should rebound, but it will take years to return to its pre-virus path.’

Pound (GBP) Muted as British Retail Sales Plummet to Record Low

Sterling remained largely flat against the Canadian Dollar this morning after data showed March’s retail sales plummeted.

Official data from the Office for National Statistics (ONS) showed sales fell by the most on record after a boost in food buying was offset by a disappointing tumble in sales of clothing and other goods.

Sales fell by -0.3% in February compared to -5.1% in March, the steepest fall in sales since the Office for National Statistics (ONS) began recording the data in 1996.

Commenting on this, head of UK equities at Lazard Asset Management, Alan Custis said:

‘The March retail sales data shows a sharp decline month on month. However, the real story will be seen in April’s figures when the lock-down will be fully felt by retailers. Here we expect to see dire numbers, but it must be balanced up by very strong online sales, which we expect will be showing growth in excess of 50% year on year. There have been clear winners and losers and we think this will only become more apparent the longer the crisis continues.’

Meanwhile, further data showed British consumer confidence remained at its lowest level since 2009.

Sterling remained under pressure as April’s confidence held steady at -34 due to the coronavirus lockdowns and fears the country will plummet into a deep recession.

Commenting on today’s confidence data, client strategy director at GfK, Joe Staton said:

‘It is impossible to say if this is at the bottom after weeks of adjustment to the reality of lockdown life, or if further falls are to come.’

Pound Canadian Dollar Outlook: Will Oil Price Gains Buoy CAD?

Looking ahead, the Canadian Dollar (CAD) could make gains against the Pound (GBP) if oil prices continue to rise.

If oil markets are offered further support, it could boost prices further on Friday and into next week and send the Pound Canadian Dollar (GBP/CAD) exchange rate lower.

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TAGS: Pound Canadian Dollar Forecasts