Bank of England (BoE) Chief Economist’s Call for Positivity Fails to Boost Pound Canadian Dollar (GBP/CAD) Exchange Rate
Confident commentary from Bank of England (BoE) chief economist Andy Haldane was not enough to keep the Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate from losing ground.
While Haldane called for the adoption of a more optimistic outlook on the UK economy this failed to stir any particular sense of demand for Pound Sterling (GBP).
Investors remain wary of the potential for the economy to come under greater pressure in the coming months, given the ongoing Covid-19 crisis and Brexit-based uncertainty.
As a result, even though Haldane also poured cold water on the prospect of any imminent interest rate cut, GBP exchange rates were left on a weaker footing once again.
Underwhelming Monthly Growth Rate May Weigh on Canadian Dollar
The mood towards the Canadian Dollar (CAD) could falter, though, if July’s monthly gross domestic product fails to impress.
Forecasts point towards the growth rate moderating somewhat on the month, slowing from 6.5% in June to 3%.
While this would still represent a solid month of growth, boosting hopes for a stronger third quarter GDP reading, this could still weigh on CAD exchange rates.
Evidence that the Canadian economy started to lose some of its initial recovery momentum at the start of the third quarter could put a dampener on the economic outlook.
However, the GBP/CAD exchange rate may still remain under pressure as long as markets see reason to bet that Canada’s growth will pick up further in the coming months.
If September’s manufacturing PMI picks up on Thursday this could offer the Canadian Dollar a solid rallying point against its rivals.
Any further signs of resilience within the Canadian economy may well help to keep a floor under CAD exchange rates this week.
GBP/CAD Exchange Rate Jitters Forecast as Final Round of Brexit Talks Wrap up
Although no change is forecast for September’s finalised UK manufacturing PMI reading this could still provoke some fresh volatility for the Pound.
As long as signs point towards the sector struggling to hold onto its initial post-lockdown bounce the potential for GBP/CAD exchange rate gains may prove limited.
The latest developments surrounding Brexit may drive the Pound lower across the board, meanwhile, if the two sides fail to reach an agreement in their final round of scheduled talks.
Unless the risk of a no-deal scenario falls sharply a sense of anxiety over the economic outlook looks set to keep the Pound biased to the downside for some time to come.
On the other hand, signs of progress towards a potential agreement could see GBP exchange rates trending sharply higher across the board.
As markets have already largely priced in the possibility of a cliff-edge scenario any move towards a deal could drive a strong increase in demand for the Pound.