July 15, 2021 - Written by John Cameron
STORY LINK Pound Canadian Dollar (GBP/CAD) Exchange Rate Edges Higher as UK Economy Bounces Back
GBP/CAD Exchange Rate Rises as UK Chancellor Says Economy is ‘Bouncing Back’
The Pound to Canadian Dollar exchange rate rose by 0.2% following a bullish statement by UK Chancellor Rishi Sunak, who said that the UK economy appears to be ‘bouncing back’. The pairing is fluctuating around CA$1.73 at the time of writing.
GBP benefited from a better-than-expected unemployment rate report for June, with the figure falling by 0.2% between March and May.
Chancellor Sunak commented on the data:
‘As we approach the final stages of reopening the economy, I look forward to seeing more people back at work and the economy continuing to rebound.
‘We are bouncing back – the number of employees on payrolls is at its highest level since last April and the number of people on furlough halved in the three months to May.’
Today also saw Bank of England (BoE) policymaker Michael Saunders that economic activity had recovered ‘a bit more than expected’ in May, when the BoE last drew up its economic forecasts.
Mr Saunders commented:
‘Activity appears to have recovered a bit more than expected. And, even relative to this improving trend, there have been large upside surprises in prices and indicators of labour market tightness.’
Confidence in the UK economy has driven up the GBP/CAD exchange rate today, with Downing Street having confirmed that lockdown restrictions will be lifted on July 19.
Canadian Dollar (CAD) Exchange Rate Falls on Sinking Oil Prices
The Canadian Dollar (CAD) fell today as falling oil prices limited the appeal of the commodity-linked ‘Loonie’.
Oil prices slid by 2% over supply fears following an OPEC+ agreement to boost global oil supplies as the world recovers from the Covid-19 crisis.
Andrew Lipow, president of Lipow Oil Associates in Houston, said:
‘The significant decline in gasoline and diesel demand has pressured prices, even though crude oil inventories have continued to draw.’
Avtar Sandu, senior commodity trader at Phillips Futures in Singapore, also added:
‘The market is not taking any chances. Prices are very overbought anyway, so traders might want to take some money off the table before the deal is concrete.’
Falling oil prices have dampened confidence in the Canadian economy, which relies heavily on oil exports.
GBP/CAD Exchange Rate Forecast: Could Rising Oil Prices Buoy-Up the ‘Loonie’?
Canadian Dollar traders will eye tomorrow’s release of the latest Canadian housing starts data for June. Could an uptick in housing sales boost the ‘Loonie’?
Oil prices will also remain in focus this week. Any further signs of falling oil prices would continue to drag down the commodity-linked Canadian Dollar.
We could see the GBP/CAD exchange rate head higher this week as the UK edges closer to the lifting of lockdown restrictions on July 19.
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TAGS: Canadian Dollar Forecasts Pound Canadian Dollar Forecasts