Currency News

Daily Exchange Rate Forecasts & Currency News

Pound Canadian Dollar Exchange Rate Dips as BoC Expectations of Strong Canadian Economic Rebound

June 10, 2021 - Written by John Cameron

GBP/CAD Exchange Rate Falls on Canadian Oil Market Optimism


The Pound Canadian Dollar (GBP/CAD) exchange rate dipped this morning after the Bank of Canada (BoC) held interest rates flat at 0.25% yesterday and left monetary policy largely unchanged. The pairing is currently fluctuating around CA$1.70.

Some key takeaways from the BoC’s monetary policy statement show a steady confidence in Canada’s economy. The BoC said:

‘The Canadian economy is expected to rebound strongly, led by consumer spending, as vaccinations pick up and restrictions are lifted.’

‘We will continue to provide the appropriate degree of monetary policy stimulus to support the recovery and achieve the inflation objective.’

As a result, the Canadian Dollar (CAD) has benefited from rising confidence in the nation’s economic recovery in the months and years ahead.

Rising oil prices have also provided some uplift for the CAD/GBP exchange rate today.

Tsvetana Paraskova, an analyst at Oil Price, explains:

‘Canada’s oil and gas sector is growing increasingly optimistic about its near-term future as economies recover and oil prices rally. Yet, the industry faces growing challenges in the medium and long term, mainly in the form of the never ending battle over pipeline takeaway capacity and the environmental and activist shareholder urgency to hold the oil industry accountable for climate change.’

The commodity-correlated ‘Loonie’ has benefited from growing optimism in Canada’s oil industry.

Pound (GBP) Exchange Rate Falls on Fears of a ‘Substantial Third Wave’ of Covid-19


The Pound (GBP) fell today after the UK Government’s Sage committee of scientific experts have warned about the possibility of a ‘substantial third wave’ of Covid-19 infections and hospitalisations.

As a result, GBP investors have become more concerned about a possible delay to Prime Minister Boris Johnson’s roadmap to ease lockdown measures on 21 June.

Boris Johnson said on Wednesday:

‘What everyone can see very clearly is that cases are going up and in some cases hospitalisations are going up. I think what we need to assess is the extent to which the vaccine rollout, which has been phenomenal, has built up enough protection in the population in order for us to go ahead to the next stage.’

Prof Neil Ferguson, of Imperial College London, said:

‘There is a risk of a substantial third wave. It could be substantially lower than the second wave or it could be of the same order of magnitude, and that critically depends on how effective the vaccines are at protecting people against hospitalisation and death.’

In UK economic data, today saw the publication of the latest UK RICS housing price balance for May, which beat forecasts and rose by 83%.

However, concerns over a possible delay to the easing of lockdown restrictions has limited the GBP/CAD exchange rate today.

GBP/CAD Exchange Rate Forecast: Could Strong UK Economic Data Boost the Pound?


Pound (GBP) investors will be awaiting tomorrow’s release of April’s UK manufacturing and industrial production data.

Any improvement in either sector would be Pound-positive.

Tomorrow will also see the release of the UK GDP data for April, which is expected to rise by 2.4% month-on-month.

If this is revised higher, however, then the Pound Canadian Dollar exchange rate would claw back some of its losses.

Canadian Dollar (CAD) traders will be looking ahead to tomorrow’s speech from Paul Beaudry, the Deputy Governor of the Bank of Canada (BoC).

Any bullish comments about the outlook for the Canadian economy would be CAD-positive.

Like this piece? Please share with your friends and colleagues:

International Money Transfer? Ask our resident FX expert a money transfer question or try John's new, free, no-obligation personal service! ,where he helps every step of the way, ensuring you get the best exchange rates on your currency requirements.


TAGS: Canadian Dollar Forecasts Pound Canadian Dollar Forecasts

Comments are currrently disabled