The Canadian Dollar has come under focus as fears surrounding the coronavirus increase. The market suggests that the BoC outlook may be impacted by the virus as the CAD softens versus safe-haven currencies. The Canadian Dollar is not the only currency effected by the spread of the virus, with other risk-sensitive currencies like AUD and NZD both suffering losses as the market risk appetite reduces. Meanwhile, GBP is waiting on its Bank of England interest rate decision which is set to be announced later today at 12:00 GMT.
Weaker Canadian Dollar as Coronavirus Shows No Signs of Stopping Infectious Path
The Canadian Dollar was weaker yesterday as investors continued to weigh up the potential economic threats that the rapidly spreading coronavirus presents to the country. Despite deliberations, it appears that the CAD is unprepared for the potential impact that the disease could have on the Bank of Canada’s outlook. CAD fell to safe-haven currencies like the USD as investors flocked amidst fears of the damage that could be caused by the virus. The markets risk appetite has dropped since the break-out of the disease and looks to remain low for the foreseeable future. The Canadian currency was one of the worst performers of the week, but still managed to better other currencies who fared worse as a result of the spread of the disease.
Investors in the Canadian Dollar are concerned that the virus could threaten the outlook for the BoC interest rate policy and Canada’s best-in-class cash rate of 1.75% in a two-pronged attack. The worries come as the are potential direct implications that could arise stemming from the virus after having arrived in Canada alongside the global trade route to the fore of the BoC’s policy deliberations.
GBP Awaits BoE Interest Rate Decision to Shape the Outlook of the UK
The UK awaits its Bank of England interest rate decision which is set to be unveiled at 12:00 GMT today. The lead-up to today has been volatile for GBP. The currency celebrated positive economic data results last week which saw record levels of employment figures. But it appears that these data releases have not been enough for the rate cut bets to be eliminated. Therefore, jitters from investors have persisted which has caused a drop in GBP exchange rates.
Attention will turn to the BoE’s decision later today as the next steps for GBP are paved by the central bank.
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