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GBP/CAD Exchange Rate: Pound Canadian Dollar Weakens Despite UK Economic Optimism

April 30, 2021 - Written by John Cameron

The Pound Canadian Dollar (GBP/CAD) exchange rate has weakened during this morning’s session as a lack of notable data from the UK does little to support Sterling.

At the time of writing the GBP/CAD pairing are trading at around CA$1.7091 as the ‘Loonie’ finds support in rising oil prices and positive retail sales data.

Pound (GBP) Weakens as UK Economic Optimism Runs out of Steam

The Pound has weakened against the Canadian Dollar this morning as due to a lack of any notable data, the excitement over the UK’s economic optimism runs out of steam heading into the weekend.

For much of the week the Pound has found itself supported on hopes of a rapid recovery from the coronavirus pandemic across the UK.

However, GBP has seen itself faltering over the course of the week as the excitement over recovery only lasted so long.

Limiting losses for Sterling comes in the form of the news that those aged 40 and above are now able to book in for their coronavirus vaccine in the UK.

The rollout has now been expanded twice in the past week, as the UK’s vaccine rollout looks set to be delivered on time.

Canadian Dollar (CAD) Supported by BoC Outlook

The Canadian Dollar is being supported against the Pound this morning as an increase in retail sales and hawkish outlook from the Bank of Canada (BoC) continues to support the currency.

The ‘Loonie’ continues to find support from the BoC’s recent comments surrounding the economic outlook from Canada as the bank reduced its weekly asset purchases at their April meeting and brought forward guidance for the first interest rate hike now expected later in 2022.

Recent positive retail sales released on Wednesday has also helped bolster the Canadian Dollar during the second half of the week.

This afternoon, the release of the latest monthly GDP figures from Canada could cause CAD to weaken however.

GDP is expected to have fallen 0.2% in February as coronavirus cases surged and lockdowns were reinforced in the country.

Pound Canadian Dollar Exchange Rate Outlook: BoE Decision in Focus

Heading into next week, a busier economic calendar for the Pound will see the latest interest rate decision from the Bank of England towards the end of the week.

Though interest rates are expected to remain at 0.1%, if the BoE continue to take a more positive tone surrounding the UK’s economic recovery then Sterling could see itself heading higher.

Canadian Dollar traders will keep an eye on the latest manufacturing PMI for April from Canada which is forecast to have fallen to 56 points though the figure would remain in growth territory.

The GBP/CAD exchange rate will continue to be driven by any further coronavirus developments over the weekend, as England gears up for the third stage of lockdown easing in a couple of weeks time.

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