Pound to Canadian Dollar Exchange Rate: Can the Sterling Overcome Brexit Fears?

Canadian Dollar Receives Boost from Uptick in Oil Prices as Consumer Data Shows Little Growth

GBP has struggled over the past couple of weeks, with Brexit fears being re-ignited as the EU-UK negotiations got underway at the beginning of the month. A recent run of poor economic data has also not helped GBP gain any support as the outlook for the economy looks dreary. Data releases yesterday only piled on the pressure for the pound as GDP forecasts showed sluggishness. Meanwhile, the Canadian dollar remains unable to edge over the pound in their exchange rate pairing. The Canadian dollar continues to be plagued by the coronavirus outbreak as markets hold off on the risk-sensitive currency until the threat declines.

GBP Suffers After Yesterdays Weak Data Releases

Tuesday saw the release of the UK’s flash GDP figures for Q4 in 2019, the report failed to impress UK investors as the figure was seen to stagnate at 0%. This confirmed the market’s fears of an economic slowdown which hindered pound sterling, which also received its manufacturing and retails sector sales reports for December. Both reports showed a decline which knocked the pound lower. The manufacturing figure dropped by -2.5% with the retail figure decreasing from 1.7% to 0%.

Brexit Still Haunts the GBP, Could It Be Too Much to Handle?

Brexit has not helped GBP as negotiations got underway at the start of this month. With the UK government laying out firm terms in which they appear stubborn to stray from, the market reacted negatively as the chance of a no-deal Brexit was re-ignited once more. Tensions between the UK and EU have heightened since the start of the month with the EU threatening to tighten their MiFID regulations which would make business more difficult for the City of London. The pound continues to struggle as a result of the Brexit uncertainty, and is the main reason its potential has been capped in recent weeks. The uncertainty will likely continue up until the final decision in December, as such GBP is expected to be volatile and with poor economic data not helping, GBP currently sits trading lower than the previous month.

CAD Continues to Be Held Back by Coronavirus

The Canadian dollar continues to be held in a stranglehold from the coronavirus outbreak. As a risk-sensitive currency, CAD has dwindled as the market switched to a risk-off sentiment following the outbreak. With little positive news breaking surrounding the containment of the virus and the number of cases and deaths rising, the pressure remains firmly on CAD. The virus has also reduced the price of oil as demand has also lowered, this has been a crushing blow for CAD as oil is the country’s main export.

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