April 8, 2021 – scripted by John Cameron.
Pound Sterling / Canadian Dollar Exchange Rate Falls Amid Improved Forecasts For Canada’s Economy
The pound-to-Canadian dollar (GBP / CAD) exchange rate fell today after a sharp rise in the latest Canadian PMI Ivey data for March, which beat forecasts to 72.9. The pair is currently hovering around CAD 1.73.
The Canadian dollar (CAD) benefited from a jump in the Ivey PMI to a 10-year high as it indicates a recovery.
Reuters analysts commented on the data:
“The seasonally adjusted index rose to 72.9 from 60.0 in February, beating analysts’ expectations of 60.5. It was the highest level in the index since March 2011 and the second highest since the launch of the PMI in 2000. ”
“The Ivey PMI measures monthly fluctuations in economic activity, as evidenced by a group of public and private purchasing managers across Canada. A reading above 50 indicates an increase in activity. “
The oil-sensitive loonie is also benefiting from the rise in oil prices as demand continues to rise due to the improved outlook for the global economy.
Long-term bullish potential in the oil market also supports confidence in the Canadian economy and contributes to the CAD / GBP exchange rate.
Pound (GBP) Struggles Despite Strong UK Construction PMI
The pound (GBP) failed to rally against the loonie, despite the UK’s latest construction PMI topping forecasts and rising to a six-year high.
This figure exceeded consensus and rose from 53.3 to 61.7 last month.
Duncan Brock, Group Director of the Chartered Institute of Procurement and Supply, commented:
“Construction was full of the joys of a spring in March with a sudden leap into robust growth, fueled by a widespread increase in workload across all sectors. The commercial conveyor has been particularly impressive, showing the highest efficiency since the end of 2014. “
UK markets are becoming more confident about the outlook for the national economy, especially now that quarantine restrictions will be further eased on April 12.
However, GBP investors are worried about the recent news of the Oxford AstraZeneca vaccine following reports of rare cases of blood clotting.
Confident that the vaccine will suffer from reports, UK markets are concerned that the vaccine could backfire with vaccine rollouts to those under 30.
GBP / CAD Exchange Rate Forecast: Could Rising Oil Prices Drive The Canadian Dollar Up?
Pound (GBP) investors will be awaiting tomorrow’s latest Halifax house price data for March.
Any improvement in the outlook for the UK economy will push the pound / Canadian dollar exchange rate higher.
Canadian dollar (CAD) traders will be watching tomorrow’s March Canadian unemployment report.
However, if the unemployment rate in Canada continues to rise, we may see the loonie start to fall.
The exchange rate of the pound and the Canadian dollar will remain sensitive to oil prices this week. Any sign of a rise in oil prices will raise the oil-sensitive CAD.
TAGS: Canadian Dollar Pound Pound Canadian Dollar Predictions