The Pound sustained periods of losses throughout trading yesterday against CAD, owing to negative data sets being released and fears over how the UK economy will fare during and after the current Coronavirus crisis.
Yesterday morning the UK construction sector posted the biggest slowdown seen in over 10 years for March, and this even though not all construction output has been halted throughout this period. On top of this, economists are warning that Britain, amongst over countries, is facing what could be the greatest economic downturn in a Century and there are also fears that the recovery could take a while to recover even after the lockdown has lifted.
UK Consumer Confidence Hits More Than 10-Year Low
Speaking yesterday, Andrew Wishart, UK economist at Capital Economics, said, “It may take time for consumers to start spending again after the lockdown ends, making the eventual recovery from the coronavirus recession more protracted.” In addition, Gfk, who conduct surveys with on British consumer confidence, released the results of a poll they ran in March which has highlighted the weakest reading since February 2009.
The Canadian economy is of course also feeling the effects of the pandemic and lockdown and as such we are likely to continue to see volatile trading conditions for GBPCAD. In March the Bank of Canada conducted a survey with 52 firms to understand how they are being impacted by Covid-19. In a statement yesterday the bank stated, “The impact of the shock on firms was still escalating, with some firms seeing very recent sharp declines in demand and others only expecting them.”
Oil Prices Fall on Delayed OPEC Meeting
The Canadian economy is heavily reliant on the Country’s export of Crude Oil and the fall in prices yesterday could have implications on the strength of CAD going forward. A meeting due to take place between Saudi Arabia and Russia to discuss output cuts was postponed yesterday, amid fears that there could be an oversupply considering the current global crisis having a negative impact on demand. The meeting has now been rescheduled to Thursday, so any clients with a GBPCAD requirement should keep an eye on this in case the Canadian Dollar’s value is affected.
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