Pound Sterling to Canadian Dollar (GBP/CAD) Exchange Rate Forecast: Weakening UK GDP Weighs on Pound Today
Confirmation that the UK’S GDP slowed in the third quarter has seen the Pound (GBP) trending lower against rivals today, in spite of continued oil glut concerns weighing on the Canadian Dollar (CAD).
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Scepticism over Autumn Statement and Spending Review Dragged Down GBP/CAD Exchange Rate
While the Pound (GBP) was initially bolstered by the seemingly softened Autumn Statement and Spending Review, Thursday saw many of those initial gains reversed as some of the finer details of the budget were digested. Doubts have been raised as to the viability of George Osborne’s new budget, with the Office for Budget Responsibility (OBR) expressing some hesitance over the true accuracy of their revised tax receipts forecast. As spending cuts are still severe in some areas, in spite of the publicised U-turn on controversial changes to tax credits, investors soon began to shy away from Sterling once more.
As the US Dollar (USD) has been strengthening significantly over recent days the Canadian Dollar (CAD) has struggled amidst an increasing atmosphere of risk aversion. However, Saudi Arabian officials have recently indicated a willingness to intervene and stabilise oil prices in the wake of the persistent global supply glut and continuing price weakness. With Brent crude having strengthened somewhat on market optimism, this helped the ‘Loonie’ to capitalise on the softer Pound, pushing the GBP/CAD exchange rate into a downtrend.
Pound Sterling (GBP) Downtrends as UK GDP Slows and Net Trade Weakens to Eighteen-Year Worst
Sentiment towards the Pound has not seen any improvement on Friday, following a weaker-than-expected GfK Consumer Confidence Survey. Growth within the domestic economy was also confirmed to have slowed from 0.7% to 0.5% on the quarter, despite the service sector having returned to pre-recession levels of expansion. The strongest drag on the UK’s GDP was the weakest net trade figure in eighteen years, as imports were shown to have accelerated at a far greater rate than exports in the third quarter. This disappointing result has eroded demand for Sterling further ahead of the weekend.
GBP/CAD Exchange Rate Forecast: ‘Loonie’ Softness Predicted on Lower Canadian PPI Today
This afternoon’s Canadian Producer Price Index could see the Canadian Dollar soften, however, as predictions point towards a decline from 3.0% to 1.0% on the month in October. As weakening prices do not bode well for a rise in inflationary pressure within the domestic economy, this is likely to see the ‘Loonie’ falter.
Current GBP, CAD Exchange Rates
At time of writing, the Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate was slumped in the region of 2.0045, while the Canadian Dollar to Pound Sterling (CAD/GBP) pairing was on an uptrend in the range of 0.4984.