January 11, 2022 - Written by John Cameron
STORY LINK Pound Canadian Dollar Exchange Rate News: GBP/CAD Rangebound amid Slowing UK Retail Sales
GBP/CAD Directionless amid Slowdown in UK Retail Sales
The Pound Canadian Dollar (GBP/CAD) exchange rate is trading in a narrow range at the beginning of today’s session in response to UK retail sales showing a slowdown in December.
At the time of writing, the GBP/CAD exchange rate is trading at approximately CA$1.7198 with minimal market movement.
Pound (GBP) Muted Following Slowdown in BRC Retail Sales
The Pound (GBP) is rangebound against the Canadian Dollar (CAD) at the beginning of today’s session in response to a slowdown in the British Retail Consortium (BCR) retail sales figures.
December’s retail sales printed at 0.6%, slowing from November’s 1.8%, further than the expected forecast of 1.5%.
Fears over surging Covid-19 cases appeared to weaken consumer confidence, and in turn dented sales over the festive period.
The data showed that Christmas retail sales were dominated by clothes and jewellery, whilst food and drink sales remained consistent.
Figures showed that more people opted to purchase online goods rather than on the high street due to the uncertainties surrounding the Omicron variant.
The report also highlighted the issues likely to face the sector in 2022, including increased taxes and energy bills.
Helen Dickinson, chief executive of the BRC, said:
‘Retail faces significant headwinds in 2022, as consumer spending is held back by rising inflation, increasing energy bills, and April’s national insurance hike.
‘It will take continued agility and resilience if they are to battle the storm ahead, while also tackling issues from labour shortages to rising transport and logistics costs.’
Canadian Dollar (CAD) Mixed as Coronavirus Cases Surge
Meanwhile, the Canadian Dollar (CAD) is directionless against the Pound (GBP) this morning as coronavirus case numbers continue to rise in the country.
Canada has reported 777,609 confirmed cases of Omicron since the variant was first identified in the country.
Currently, there are four times the number of Omicron cases than there was during the peak of the second and third waves of coronavirus.
This is causing a strain on the healthcare system, with hospital admissions continuing to increase.
However, the actual case numbers are thought to be higher than those reported due to a shortage of testing resources.
Last week, Medical Officer of Health for Waterloo, Dr Hsiu-Li Wang, said:
‘What it's really saying right now is that the number of clinical cases that we're detecting, especially because we’re only testing individuals in high-risk settings, they are only a fraction of the number of infections.’
In response to the high case numbers, the Centers for Disease Control and Prevention (CDC) has warned American citizens not to visit the neighbouring country in a bid to reduce the number of individuals returning with the the variant.
This may cause further pressure on CAD’s appeal, with the tourism industry likely to struggle during this time.
On the other hand, crude oil prices remain high, though softer than yesterday, which looks to support the oil-sensitive ‘Loonie’.
GBP/CAD Exchange Rate Forecast: Will UK GDP Lift GBP?
Looking ahead, the Pound Canadian Dollar exchange rate is likely to remain vulnerable to coronavirus developments due to a lack of data until the end of this week’s session.
On Friday, the Pound may be supported by November’s GDP growth data which is forecast to print at 0.4%, higher than the previous 0.1%.
November’s UK industrial production is forecast to return to growth of 0.2% after October’s -0.6% contraction, which may provide Sterling with more support.
On the other hand, the commodity-linked CAD may fluctuate in line with shifting crude oil prices.
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