The Pound remains resilient this morning versus the Canadian Dollar despite the United Kingdom waking up to a new dawn with new stricter social distancing rules. Having traded in a broadly 1.65-1.70 range for the past seven days the pound opens this morning in the middle of this range at 1.6750 area.
This continues the trend of Sterling resilience against most commodity currencies, such as the Canadian Dollar, due to their economic reliance on the export of their natural resource. For Canada this is their oil exports and yesterday saw prices setter at $23.36 a barrel having averaged $39.11 per barrel through December 2019 (sourced from economic dashboard Alberta). Oil prices have been pressured through the start of this year by a significant drop in demand caused by the coronavirus pandemic and a price war between producers in Russia and Saudi Arabia.
Coronavirus continues to place pressure on both economies
With the UK now at almost lock down in an attempt to quell the rapid spread of coronavirus, Canada appear hot on our heels as Prime Minister Justin Trudeau urged Canadians to “go home and stay home!” Speaking from isolation after his wife tested positive for Covid-19 last week PM Trudeau stating.“ We’ve all seen the pictures online of people who seem to think they’re invincible,” the prime minister said. “Well, you’re not. Enough is enough.”
For the UK, Prime Minister Boris Johnsons words were equally unambiguous, speaking on Monday, the prime minister said the country faced a “moment of national emergency” and staying at home was necessary to protect the NHS, save lives and tackle “the biggest threat this country has faced for decades”.
The Pound to brace itself ahead of significant data releases this week
A quiet week ahead for the Canadian dollar in terms of economic date but the Pound has some hurdles to jump over if it wishes to remain ahead of the curve versus this commodity-based currency. Having seen significant losses in its major pairings (USD/EUR) the Pound still sits comfortably above it’s 1.5870 low in August last year. Manufacturing, Inflation data and Retail Sales all feature for the UK releases this week and will give us some insight in to how the economy is reacting to the spread of Coronavirus and the changes it is bringing to every day life across the globe.
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