The pound to Canadian dollar this morning was trading at 1.7505 on the interbank exchange rate at the time of writing. The pound to Canadian dollar interbank exchange rate has edged up slowly from the recent lows seen on the 19th March of 1. 6541.
The global number of cases of Coronavirus have now exceeded 930,000. The number of cases in Canada is relatively low at 9,700 which could help the Canadian dollar if the number of cases do not increase dramatically. Prime Minister Boris Johnson said the UK will “massively” increase the numbers being tested for Covid19.
Low Oil Prices Affecting Canada
Oil prices started falling prior to the Coronavirus, started by an oil price war between Saudi Arabia and Russia. Now with the additional effect of the virus, it has created a significant demand-side problem for oil, as businesses have shut down and millions of individuals in developed markets stay at home.
A reduction in oil prices means that Canada’s key exports are worth less than they would otherwise be and weakens Canada’s terms of trade and the value of its currency. In which case we could see the GBPCAD forecast rise as a result of this.
Weaker UK Manufacturing Data
It is now reported that close to 1 million people in the UK have applied for universal credit in the last two weeks, around nine times the normal number. UK purchasing managers index data for the manufacturing sector fell yesterday to a 3 month low of 47.8 in March down from 51.7 in February, creating volatility for the pound.
This morning UK Nationwide housing price index, month on month for March released came in better than expected at 0.8% against a forecast of -0.1%. UK Construction purchasing manufacturers index for March is expected to be released this morning at 09:30am. Tomorrow, more significant data that is released in the UK will be services purchasing managers index for the month of March which is currently forecast lower at 34.8 against a previous reading of 35.7.
Later this afternoon Canadian dollar data released at 1:30pm is forecasting trade balance figures for February to show a decline and currently forecast at -1.87 billion versus a previous reading of -1.47 billion.
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