Heading into a new week, the pound to Canadian dollar exchange rates are favouring the upside following the release of the UK’s factory output figures which showed a spike to a 10-month high. This has boosted GBP as the post-election rebound that investors had hoped for appears to be holding weight. Meanwhile the Canadian dollar has suffered once again at the hand of the coronavirus. Rising fears came after South Korea announced a state of emergency. As a result, the price of oil sunk, bringing CAD down with it.
GBP rises on improved UK economic outlook
The pound to Canadian dollar (GBP/CAD) exchange rate rose by 0.4% on Sunday, with the pair trading at around the level of CA$1.715 following the release of the UK’s factory output figures. The data showed that the UK has displayed record highs that haven’t been seen in 10-months. This came off the back of the UK’s Markit manufacturing PMI which rose unexpectedly from 50 to 51.9. This has given GBP investors something to celebrate about, as the currency rises higher, edging over CAD.
However, the IHS Markit reports were more noticeably downbeat it the statement it gave in which it commented on the COVID-19 outbreak which had weighed on export sales and the receipt of manufacturing components from suppliers. They also noted that February data pointed to the sharpest month-on-month drop in the supplier’s delivery times index in nearly three decades of data collection, whilst pre-production inventories fell to the largest extent since December 2012. Brexit developments also continues to limit the pound as fears rise about whether the UK will manage to secure a trade deal with the EU post-transitional period.
Canadian Dollar Falls as Market Fears Spike Once Again Following South Korea Covid-19 Outbreaks
The market has suffered more blows to its risk appetite over the weekend as South Korea declared a state of emergency after its number of confirmed coronavirus cases rose from single figures to above 60 cases. Fears concerning the disease were easing before this, which saw CAD gain. But now that market appetite is suppressed once more, the price of oil has sunk, dropping the Canadian dollar with it.
Looking ahead for CAD, Tuesday will see the Bank of Canada’s deputy governor Timothy Lane deliver a speech about the Canadian economy, any dovishness will see CAD drop in strength.
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