The British Pound is trading at 1.74 against the Canadian Dollar as this week begins, up 0.30% with a YTD return of 1.34%. The open rate sits at 1.73 compared to the previous close of 1.74. The pair has a daily range between 1.73 and 1.74 and a 52-week range which is forecasted to settle between 1.65 and 1.80.
With continued concerns about rising COVID-19 numbers and extended lockdown measures being implemented on Monday in Canada, the three-month high that GBP/CAD has been experiencing is at risk, causing traders to wonder if the GBP will be able to rally in the coming weeks.
The initial enthusiasm of the Pound-to-Canadian Dollar exchange rate is likely to be contained since the stock markets have been influenced by an ongoing coronavirus and Brexit-related risks. “An effective prolongation of the UK ‘lockdown’ and HIS Markit PMI surveys, which are set to provide an early estimate of the damage already done to the economic recovery by November’s national shut-in, will set the Monday morning scene for the Pound” according to PoundSterling Live.
After recovering from yearly losses in a short-lived push, the success and stability of the GBP moving into December will be dependent on the finalization of Brexit deals.
The Canadian Dollar will continue to fluctuate based on coronavirus measures, stock market trends, and oil prices, as seen over the last few months. Traders will also be paying attention to the Euro as it also impacts the Canadian Dollar Index.
“In Canada, only the payroll data are due, and since they lag so far behind the household survey measure of employment, they don’t tend to be market movers. Instead, eyes will be on provincial leaders wrestling with decisions on whether to further constrain activity in the face of a strong second wave of COVID-19” says Avery Shenfeld, the chief economist at CIBC Capital Markets.
By Surina Nath