GBPCAD has remained rangebound for some time and has failed to make a significant break up or down. The currency pair is currently trading at 1.7280, which is only 0.5 per cent lower than 1 month ago and whilst there have been fluctuations in the interim, movement has been limited.
Yesterday, UK coronavirus cases surpassed 165,000 and the death toll tipped 26,000. The UK death toll is now only behind that of the US and Italy, a worrying sign for the UK government.
Boris Johnson has been back in the driving seat for 3 days but there is still no sight of an exit plan. Instead, a senior advisor confirmed yesterday that the scientific thinking has not yet concluded, and the government was still trying to map the best route forward. Dominic Raab, who chaired the meeting said, “We are waiting for Sage’s advice, which we are expecting in early May.” Raab also highlighted Germany’s recent relaxation of the lockdown and that the infection numbers did rise back up.
Meanwhile, Sir Keir Starmer, the new Labour leader has confirmed he had a constructive call with prime minister Boris Johnson about the coronavirus crisis and that they plan to continue talks next week.
Raab has echoed Michael Gove’s comments that the UK will not extend the Brexit transition period. The UK has until June 30 to request an extension to the transition period, otherwise the UK faces trading on World Trade Organisation rules with the EU if a deal cannot be reached before the end of the year. An extension to the transition period would likely boost the pound.
Canadian Economy in Worst Recession on Record, Says Reuters Poll
A Reuters poll of economists has said that the Canadian economy is likely in its deepest recession on record and will only make a modest recovery over the next 12 months as it takes a direct hit from the coronavirus crisis and the crash in oil prices.
Economists have cut their economic forecasts following last month’s record job loss number of 1.1 million, the lockdown measures, and the slump in oil prices, which hit a record low last week.
The Bank of Canada has launched mass quantitative easing, buying up $10 billion corporate bonds and $50 billion of provincial bonds, in addition to hundreds of billions of dollars government spending to support business and the public, but even with this, the outlook for the Canadian economy remains very gloomy.
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