September 29, 2020 - Written by John Cameron
STORY LINK Pound to Canadian Dollar (GBP/CAD) Exchange Rate Steady as Canadian Markets Brace for Trump-Biden Presidential Debate
GBP/CAD Exchange Rate Rangebound Canadian Covid-19 Cases Rise
The Pound to Canadian Dollar (GBP/CAD) exchange rate held steady today, with the pairing currently trading around CA$1.722.
The Canadian Dollar (CAD) has suffered today ahead of the US presidential debate between Donald Trump and Joe Biden. As a result, the risk-averse ‘Loonie’ has remained under pressure owing to America’s heightened political uncertainty.
Jasper Lawler, an analyst at London Capital Group, commented:
‘A big upset by Trump could unearth some market volatility as investors re-price a possible Trump second term - or maybe worse - a contested election result and even bigger delays until the next stimulus package gets passed.’
Meanwhile, Canada has seen a recent rise in Covid-19 cases, sparking concerns that Canada could be facing a serious second wave. Furthermore, Ontario’s premier warned that a second wave of the virus could prove ‘more complex’.
Analysts at Reuters commented:
‘Quebec on Monday ordered new restrictions on bars and restaurants in coronavirus hot spots … as Canada’s two most-populous provinces saw big increases in COVID-19 cases.’
Pound (GBP) Steady as UK Mortgage Approvals Rise Following Covid-19 Lockdown
The Pound (GBP) held steady against the Canadian Dollar (CAD) today following the release of August’s UK Mortgage Approvals, which shot above forecasts from 66,300 to 84,700. As a result, UK investors are feeling cautiously optimistic about the British economy’s performance.
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, was more downbeat, saying:
‘The outlook for a further drop in employment also will weigh on the housing market, though with home-ownership having narrowed to a wealthier segment of the population over the last decade, job losses won’t have as devastating an impact on the market as they did in 2008.’
Meanwhile, GBP investors are eyeing Brexit developments and the UK and EU engage in trade talks.
Despite growing confidence that Downing Street will compromise and push forward on a post-Brexit trade deal, many Sterling traders are instead remaining cautious.
Following a few warning comments from the EU, relations between the two powers still remains uncertain.
Sterling is also suffering from signs of rising Covid-19 cases throughout Britain. If this continues, then the GBP/CAD exchange rate could fall later this evening.
GBP/CAD Outlook: Could a Brexit Breakthrough Buoy Sterling Today?
Canadian Dollar (CAD) investors will be bracing for tomorrow’s publication of the final Canadian GDP figure for July. Any signs of improvement in Canada’s economy would prove CAD-positive.
Tomorrow will also see the release of the Canadian Industrial Product Price report for August. Again, if this improves then the outlook for the Canadian economy would brighten and bolster the ‘Loonie’.
Pound (GBP) investors will also be eyeing tomorrow’s final GDP figure for the second quarter. Any improvement in the British economy could buoy GBP.
The GBP/CAD exchange rate will remain sensitive to Brexit and coronavirus developments this week. As a result, Sterling could edge higher on a positive breakthrough in UK-EU trade talks.
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TAGS: Pound Canadian Dollar Forecasts