GBP/CAD Exchange Rate as UK Manufacturing PMI Beats Forecasts
The Pound to Canadian Dollar exchange rate rose today, with the pairing fluctuating around CA$1.75.
Sterling rose against the ‘Loonie’ today following the publication of January’s UK Markit Manufacturing PMI, which beat forecasts and rose by 54.1.
However, with many analysts concerned that the nation’s manufacturing sector could sill be close to ‘stalling’, GBP investors are remaining cautious.
Chris Barlow, the head of manufacturing at MHA, commented:
‘UK manufacturing was artificially boosted in December 2020 because companies took measures to avoid the anticipated Brexit chaos at UK ports. Now Brexit trade friction is starting to bite.’
Meanwhile, the UK’s Covid-19 vaccination programme appears to be running smoothly, with over 13% of the population now having received the first dost of the vaccine.
As a result, GBP investors are becoming steadily more confident in the outlook for the UK economy, with vaccination numbers rising. Saturday also saw a record of 600,000 vaccinated in a single day.
Canadian Dollar Sinks as ‘Signs of Fragility’ Remain in Canada’s Economy
The Canadian Dollar failed to rise against the Pound today despite Friday seeing an uptick in Canada’s GDP.
As a result of Canada being hit hard by the coronavirus, however, ‘Loonie’ investors are becoming increasingly concerned for the nation’s economic recovery in the months ahead.
However, if oil prices continue to rise throughout the course of today’s session, we could quickly see the CAD/GBP exchange rate begin to rise.
In Canadian economic news, today saw the release of January’s Markit Manufacturing PMI, which fell below forecasts to 54.4.
Shreeya Patel, an economist at IHS Markit, was more cautious about the expansion, however, saying:
‘[S]igns of fragility [have] emerged as all five of the PMI components moderated at the start of the year. Ongoing restrictions and border closures continue to pose a threat to exports and factory operations. At the same time, higher material prices and transport costs added to the rate of input price inflation.’
‘Until vaccines are widely administered the sector can expect to see measures extend in pursuance of controlling case numbers.’
Could Progress in the UK’s Vaccine Programme Buoy Sterling This Week?
The Pound will continue to be driven by the UK’s Covid-19 situation this week.
As a result, if the vaccination programme appears to be on schedule for mid-February – when most of the four categories of vulnerable people have been vaccinated – then we could see Sterling rise.
Meanwhile, we could see the Canadian Dollar head higher if oil prices continue to rise.
The GBP/CAD exchange rate will, however, fluctuate as investors eye global Covid-19 developments.
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