GBP/CAD: Pound Crashes on UK PMI Data

GBP/CAD is witnessing another crash on Friday, after slipping 0.21% yesterday. Currently, one British pound buys 1.7108 Canadian dollars, down 0.24% as of 10:21 AM UTC. The sterling is dragged down by weakening services and manufacturing sectors.

Services PMI Drops to Lowest Level Since July 2016

UK business recorded the largest decline since 2016, according to preliminary figures for November. The downturn comes ahead of the national election scheduled for December 12 and amid the ongoing Brexit uncertainty.

Data from IHS Markit and CIPS UK showed that the British economy is contracting at a quarterly rate of 0.2%.

Manufacturing purchasing managers index (PMI) dropped to a two-month low of 48.3 in November, compared to 49.6 in October. Analysts anticipated a decline to 48.8.

Elsewhere, the services PMI tumbled from 50.0 last month to 48.6 in November. This is the lowest level since mid-2016, just after the Brexit referendum. Economists were actually expecting a modest increase to 50.1.

The composite PMI, which merges both the services and manufacturing sectors, declined to 48.5 from 50.0. Also to the lowest level since July 2016.

Some economists argue that the survey points to increased worries about political uncertainty rather than an unconditional decline in economic output.

Samuel Tombs, chief economist at Pantheon Macroeconomics, commented:

“Markit’s survey has been excessively influenced by general concerns among businesses about the Brexit and political outlook and so has become a poor indicator of day-to-day economic activity. Those concerns likely have only intensified since the general election campaign kicked off.”

Elsewhere, Chris Williamson, chief business economist at IHS Markit, said that the PMI update warned that the economy is deteriorating. And also that the labour market is weaker.

The final PMI figures for the manufacturing and services sectors will be released on December 2 and 4, respectively.

Yesterday, the pound declined against the Loonie after Bank of Canada (BoC) Governor Stephen Poloz said that the country’s monetary conditions were about right considering the challenges from global trade tensions. Based on his comments, the markets reduced the probability for a rate cut at the BoC’s next meeting in December. is a news site only and not a currency trading platform. is a site operated by TransferWise Inc. (“We”, “Us”), a Delaware Corporation. We do not guarantee that the website will operate in an uninterrupted or error-free manner or is free of viruses or other harmful components. The content on our site is provided for general information only and is not intended as an exhaustive treatment of its subject. We expressly disclaim any contractual or fiduciary relationship with you on the basis of the content of our site, any you may not rely thereon for any purpose. You should consult with qualified professionals or specialists before taking, or refraining from, any action on the basis of the content on our site. Although we make reasonable efforts to update the information on our site, we make no representations, warranties or guarantees, whether express or implied, that the content on our site is accurate, complete or up to date, and DISCLAIM ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. Some of the content posted on this site has been commissioned by Us, but is the work of independent contractors. These contractors are not employees, workers, agents or partners of TransferWise and they do not hold themselves out as one. The information and content posted by these independent contractors have not been verified or approved by Us. The views expressed by these independent contractors on do not represent our views.