GBP/CAD continues to decline even though oil prices are losing ground on Thursday. Currently, the pair is trading at 1.7582, down 0.45% as of 11:00 AM UTC.
Pound Reacts to Coronavirus Impact on Economy
The sterling is apparently more damaged by the coronavirus outbreak than the Loonie. Otherwise, declining oil prices should have dragged the Canadian dollar down by now.
UK’s finance minister Rishi Sunak said he was ready to take more measures to boost the British economy to address the impact of the coronavirus epidemic in Europe. His comments came a day after the government announced the biggest stimulus budget in about 30 years.
“As the situation evolves, if we need to do more, I of course stand ready to respond,” Sunak said in an interview with Talk Radio.
Later today, UK Prime Minister Boris Johnson will chair an emergency meeting. He is expected to delay the more drastic measures to offset the virus impact. The finance minister said that the UK wouldn’t impose travel restrictions like US President Donald Trump did.
The number of confirmed COVID-19 cases in the United Kingdom increased to 456 as of Wednesday, up from 373 on Tuesday. Eight people have died so far.
Johnson will chair a meeting of the UK’s emergency committee and will decide whether to move from “contain phase” to “delay phase” in the effort to counter the coronavirus impact. The British strategy for coping with the epidemic has three key phases – containment, delay, and mitigation. If the country moves to the delay phase, it will implement social distancing measures, including school closures, more focus on home working and ban of large-scale meetings and concerts.
The possibility of more drastic measures adopted by the UK government is putting pressure on the sterling. The world is watching how Italy locked down a whole country, with people required to stay home. The image of Italy’s fight with the coronavirus triggered panic among European investors, while Canada is in a better position now.
The Loonie manages to stay strong against the pound despite declining oil prices, with both Brent and WTI futures trading much closer to $30.
