Risk of GBP/CAD Exchange Rate Volatility when UK Budget is Unveiled
The Pound (GBP) has held close to opening levels against the Canadian Dollar (CAD) today, with a lack of solid economic data limiting Pound Sterling demand.
The latest GBP-influencing news has been that Prime Minister Theresa May has apparently fought off attempts to launch a leadership challenge against her.
This increases the chances of government unity on Brexit, but still leaves major obstacles in the way of a workable Brexit deal with the EU.
Looking ahead, the GBP/CAD exchange rate could turn turbulent on Monday next week when Chancellor Philip Hammond reveals the October budget.
Many are urging Mr Hammond to embark on a spending spree to relieve cash-strapped organisations like the NHS, but this isn’t an assured outcome.
For context, the PM has declared that ‘austerity is over’, so there is added pressure on Mr Hammond to announce a loosening of the purse strings.
If increased spending is announced across the board, however improbable, the Pound could advance against the Canadian Dollar and other currency peers.
Falling Consumer Confidence could Drag GBP/CAD Exchange Rate Lower
Another factor which could unsettle Pound (GBP) traders in the near-future will be a GfK consumer confidence reading, due on 31st October.
This is tipped to show a decline in the confidence reading with a shift from -9 points to -11, indicating growing pessimism among respondents.
Such a result could rattle Pound traders and cause midweek Pound to Canadian Dollar (GBP/CAD) exchange rate losses.
Canadian Dollar to Pound Outlook: Are CAD/GBP Exchange Rate Losses ahead on GDP Data?
The Canadian Dollar (CAD) risks declining against the Pound (GBP) when the next major Canadian data comes out – this will be a GDP reading on 31st October.
Next Wednesday’s GDP figure for August is tipped to show a slower pace of growth on the month, with a shift from 0.2% to 0.1%.
Given the lacklustre growth levels seen in July, such a decline for August could unsettle Canadian Dollar traders and cause CAD/GBP exchange rate losses.
Canadian GDP growth has only risen up to 0.5% in 2018 so far, with the worst reading being a drop of -0.2% seen in January.
Will Rising Canadian Jobless Rate Cause Canadian Dollar to Pound Exchange Rate Decline?
The Canadian Dollar (CAD) faces an additional risk of losses against the Pound (GBP) at the end of next week, on 2nd November.
Canada’s employment figures for October are out on the day and some economists are forecasting a slight rise in the unemployment rate.
A jobless rate increase from 5.9% to 6% might rattle CAD traders and cause a loss against Pound Sterling, not least because it would reverse prior progress.
The Canadian unemployment rate fell from 6% to 5.9% in September, so a forecasting-matching result for October could disappoint CAD traders.
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