GBP/CAD Forecast: Pound to Canadian Dollar Exchange Rate Heads Highers on UK Inflation Rate

May 19, 2021 - Written by John Cameron

STORY LINK GBP/CAD Forecast: Pound to Canadian Dollar Exchange Rate Heads Highers on UK Inflation Rate

The Pound to Canadian Dollar exchange rate (GBP/CAD) has head higher this morning following the latest inflation rate data from the UK.

The GBP/CAD pairing are currently trending at around CA$1.7137 as Canadian Dollar investors await the latest inflation rate data from Canada.

Pound Sterling (GBP) Exchange Rate Heads Higher on UK Inflation Rate

The Pound has been heading higher against the Canadian Dollar this morning following the release of the latest inflation rate data from the UK.

Annual inflation more than doubled during April to 1.5%, the highest reading since before the pandemic in March 2020.

Ruth Gregory, senior UK economist at Capital Economics commented on the latest rise in inflation:

‘There were pockets of inflation in those sectors that are reopening, with clothing inflation bouncing back from -3.5% to +0.5%, as retailers continued to reverse the aggressive discounting during lockdowns, and furniture inflation rising from 4.5% to 5.8%. And depending on the strength of pent-up demand for hospitality, there will probably be further surges in these categories over the coming months.’

The Pound continues to find support in the UK’s latest lockdown easing, however concerns over the Indian variant of the virus and many Britain’s ignoring travel advice keeps investors cautious.

Canadian Dollar (CAD) Exchange Rate Awaits Canadian Inflation Rate

The Canadian Dollar has been muted today as markets await the latest inflation rate data from Canada for April, which could see the currency suffer.

Canada inflation is forecast to have risen to 3.2% annually, which would be the highest level since before the coronavirus pandemic began.

Although Canada’s vaccination rollout has been slow the country has enjoyed a swifter recovery than first expected.

It comes as the country has now recorded over 25,000 deaths in the country since the pandemic began.

GBP/CAD Exchange Rate Forecast: UK Retail Sales in Focus

On Friday, Pound investors will look towards the latest retail sales data from the UK for April which is forecast to have surged 37% annually as the high street reopened.

Canada will also see its own retail sales data release on Friday for March which are forecast to have risen 9% as restrictions began to be eased in the country.

Pound traders will also keep an eye on the latest flash PMI data from the UK on Friday which could see Sterling push higher heading into the weekend.

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TAGS: Pound Canadian Dollar Forecasts