Pound to Canadian Dollar Exchange Rate: Canadian Dollar Threatened by Rail Strikes as GBP Looks to Boost Public Spending

GBPCAD Rate Update: Oil Prices Fall, Along With UK Construction Output
  • Canadian Dollar Threatened by Rail Protests Which Cripple Trade Logistics
  • GBP Hopes Injection of Public Spending Can Lift the British Economy and Mute Brexit Worries

The Canadian dollar has come under threat by a new menace to the Canadian economy this week that isn’t involved with the coronavirus outbreak. Anti-pipeline protestors have demonstrated around rail lines near Belleville, Ontario and New Hazelton, B.C which has prompted CN Rail to temporarily shut-down parts of its network. This has caused havoc to the rail networks and is having knock-on effects for the Canadian economy as passengers and freight remain unable to travel, crippling the ability to move goods and facilitate trade. Meanwhile, GBP has benefitted this week as the UK government has pledged to increase public spending in an effort to boost the British economy. The government cabinet also had a reshuffle which saw the Chancellor role shift.

Canadian Dollar Threatened by Rail Protests Which Cripple Trade Logistics

The Canadian economy has suffered this week after anti-pipeline protestors demonstrated around the rail lines in Ontario and New Hazelton, B.C. The protests have prompted CN Rail to temporarily close some of its network rail lines which have wreaked havoc to Canadian trade. The closure of rail lines has interrupted trade, affecting both the transportation of passengers (workers) and freight. This has pulled the handbrake on many of the Canadian manufacturing and industrial efforts which will likely have an effect on the economic productivity for the month. President and CEO at CN Rail, JJ Ruest highlighted that the blockades have not only interrupted passenger trains affecting 42,100 passengers, but all Canadian supply chains.

GBP Hopes Injection of Public Spending Can Lift the British Economy and Mute Brexit Worries

The UK government announced this week that it plans to inject more money into public spending. Earlier in the week, the UK announced its HS2 project, which will see the implementation of a high-speed rail system. The government hopes that a boost to public spending will boost the fiscal stimulus and help GBP in the coming months post-Brexit. GBP is still under pressure from the Brexit talks which will continue until December 2020. Recent demands from the UK and retaliations from the EU with threats like the MiFID tightening saw no-deal Brexit whispers spread once more. As a result, GBP dropped. The EU-UK trade talks will likely limit GBP in the months ahead, particularly if the EU continue to harden their position on trade which will weaken the GBP as no-deal fears persist to haunt the British markets.

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