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GBP/CAD Exchange Rate Forecast: Pound Canadian Dollar Continues to Weaken

July 21, 2021 - Written by John Cameron

The Pound Canadian Dollar (GBP/CAD) exchange rate continues to fall during this morning’s session as coronavirus worries continue to keep Sterling investors concerned and a hoped rebound in oil prices drives movement in the Canadian Dollar.

At the time of writing the GBP/CAD pairing are trending around the CA$1.7271 level as the commodity-correlated ‘Loonie’ benefits from a more positive outlook for Canada’s largest export.

Pound (GBP) Weakens as Coronavirus Woes Threaten UK’s Economic Recovery

The Pound (GBP) continues to dip against the Canadian Dollar this morning as coronavirus woes worry investors.

It comes as businesses plead with the UK government to give clarification surrounding self-isolating and the NHS track and trace app as the so-called ‘pingdemic’ looks to cause supply-chains to buckle.

CEO the British Meat Processors Association, Nick Allen commented on the ongoing issues saying:

‘There's an air of despondency creeping through the industry really. Until now we've managed to keep the food supply chain running but there's a sense of we're starting to fail on that front. Morale isn't helped by the confusion that comes from these confusing messages from government.’

Regarding supply-chain issues he went on to say: ‘It's happening already. We're starting to see that at retail level and in restaurants - everyone is struggling to get things out really.’

It comes as Scotland struggles to persuade citizens to get their vaccinations, speaking to UK radio this morning Murdo Fraser of the Scottish Conservatives said:

What we've seen is quite an alarming decline in the numbers being vaccinated. On Monday the daily first doses of the vaccine hit a three-month low, only 2,483 people were vaccinated with a first dose. We are really struggling to meet this key group.’

Canadian Dollar (CAD) Bolstered by Hopeful Oil Price Rebound

The Canadian Dollar has kept traction against the Pound today as investors are hopeful a rebound in oil prices are imminent.

Canada’s largest export has fallen in the past days following the OPEC+’s latest deal which had long been delayed.

Commenting on the OPEC+ supply deal, Goldman Sachs said in a note:

‘The agreement had two distinct points of focus: a moderate increase in production which will keep the market in deficit in the coming months, as well as guidance for higher capacity which will be needed in coming years given growing under-investment.’

Canada is also enjoying a swifter vaccination rollout across the country, overtaking the US and thus bolstering the appeal of the ‘Loonie’.

GBP/CAD Exchange Rate Forecast: UK PMI Data in Focus

An absence of economic data from Canada will see ‘Loonie’ investors continuing to keep an eye on any further developments regarding oil prices in the coming days.

An uptick in prices would see the Canadian Dollar supported further against many of its major rivals.

Pound traders will look ahead to Friday’s data, the latest preliminary PMI figures for manufacturing and services for July are expected to give a broad overview into how the economy is performing.

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TAGS: Pound Canadian Dollar Forecasts

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