Currency News

Daily Exchange Rate Forecasts & Currency News

Pound Canadian Dollar (GBP/CAD) Exchange Rate Rangebound as UK Consumers Hold Back on Borrowing

August 31, 2021 - Written by John Cameron

GBP/CAD Exchange Rate Steady as UK Borrowing Falls in July


The Pound Canadian Dollar (GBP/CAD) exchange rate held steady today as UK consumers held back on borrowing as the nation’s economic recovery stumbled in July. The pairing is currently fluctuating around CA$1.73.

The Bank of England (BoE) reported that households failed to rack up any more consumer credit in July, with borrowing down by £42 million than in June.

The BoE commented on the report:

‘The annual growth rate for all consumer credit remained weak, decreasing slightly to -2.7% in July from -2.2% in June. The annual growth rates of credit cards and other forms of consumer credit also remained weak at -8.3% and -0.3%, respectively.’

Ruth Gregory, an analyst at Capital Economics, said:

‘Overall, today’s release is similar in tone to July’s retail sales data in suggesting that the resurgence in virus cases weighed on the recovery in consumer spending.

‘As a result, the risks to our view that GDP in July rose by about 0.5% m/m and that monthly GDP will climb back to its pre-pandemic size by October are skewed to the downside.’

UK business confidence remains at a four-year high, but with staff shortage issues expected to hit businesses, Pound investors have become more cautious about the outlook for the economy.

As a result, the GBP/CAD exchange rate has remained steady, with UK markets monitoring Covid-19 developments instead.

Any signs of increasing infections or hospitalisations could see the Pound to Canadian Dollar exchange rate sink later this afternoon.

Canadian Dollar (CAD) Exchange Rate Steady as Canadian Growth Stalls in Second Quarter


The Canadian Dollar (CAD) held steady against the Pound today following the publication of the latest Canadian gross domestic product data for the second quarter, which fell below forecasts from 5.5% to -1.1%.

Kim Mackrael, writing for Market Watch, commented on the data:

‘The Canadian economy contracted unexpectedly in the second quarter, falling short of market expectations, as economic restrictions associated with a spring resurgence in Covid-19 infections weighed on the country's recovery from the pandemic-induced downturn.

‘Preliminary data for July suggest the economy also contracted in that month, despite a much lower Covid-19 caseload and reduced economic restrictions.

‘Canada's gross domestic product, or the broadest measure of goods and services produced in the economy, contracted at a 1.1% annualized rate in the second quarter to 2.071 trillion Canadian dollars, or the equivalent of $1.643 trillion, Statistics Canada said Tuesday. Market expectations were for a 2.5% advance in the quarter, according to economists at TD Bank.’

As a result, Canadian Dollar investors have become more worried about the outlook for the economy, despite rising oil prices, one of the nation’s largest exports.

However, if oil prices continue to rise throughout today’s session, then we could see the CAD/GBP exchange rate begin to edge higher.

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


Canadian Dollar (CAD) traders will be looking ahead to tomorrow’s release of August’s Markit manufacturing PMI. Could an improvement in Canada’s manufacturing sector drive-up the CAD/GBP exchange rate?

Thursday will also see the release of the latest Canadian building permits and international merchandise trade data for July. If this points to an improvement in the nation’s economy, then this data would prove CAD-positive.

Oil prices will also continue to influence the commodity-linked ‘Loonie’. So any signs of returning demand for oil would boost the Canadian Dollar to Pound exchange rate.

The Pound Canadian Dollar (GBP/CAD) exchange rate could head higher tomorrow if the latest manufacturing PMI for August beats consensus and shows growth in the sector.

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