GBP/CAD edges up on Friday on positive UK manufacturing data. The pair has increased by 0.21% so far, to 1.7065 as of 10:13 AM UTC. Thus, the price action carries on with an uptrend that took off on October 29.
Judging by the 30 min chart, GBP/CAD is moving inside what seems to be an ascending triangle, which is regarded as a bullish pattern. However, the timeframe is too small to be considered for accurate forecasts.
The pair now ponders the next move after the UK published the purchasing managers’ index (PMI) in the manufacturing sector while Canada recently released its slightly disappointing GDP growth update.
UK Manufacturing Contraction Slows
The British manufacturing PMI, published by market research firm IHS Markit in collaboration with the Chartered Institute of Procurement & Supply (CIPS), rose last month to 49.6 from 48.3 in September, beating analysts’ forecasts. This is the highest figure since April.
Nevertheless, the index is still below 50 points, which acts as the dividing line between contraction and growth, for the sixth month in a row.
The increase in manufacturing activity was caused by companies rushing to stockpile ahead of what was expected to be another Brexit deadline.
Nevertheless, the UK parliament didn’t allow Prime Minister Boris Johnson to handle the withdrawal process according to his plans, forcing him to request another extension from EU leaders. Thus, the deadline was moved to January 31, 2020.
Canada’s GDP Grows Less Than Expected
Yesterday, Statistics Canada reported that the country’s economy gained only 0.1% in August, while economists anticipated an increase of 0.2% after a flat reading in July. In total, 14 out of 20 industrial sectors expanded on the month, while the rest declined. In annual terms, the GDP gained 1.3% as of August.
The statistics agency reported that goods-producing industries expanded by 0.2% in August, after two negative months. Elsewhere, services-producing sectors added 0.1% on the month.
Canada’s manufacturing sector expanded by 0.5%, mainly driven by higher sales. Durable manufacturing rose 1.0%, while non-durable manufacturing dropped by 0.2%.
Earlier this week, the Bank of Canada decided to leave the interest rate at the same level, though it turned to a more dovish stance.