GBP/CAD is slowly but steadily departing from its lowest level since October 2019. Currently, the pair is trading at 1.6932, up 0.47% as of 10:10 AM UTC.
The pound has been under pressure on fresh retail sales data that has disappointed investors. However, the British currency has managed to advance against the Canadian dollar after the Bank of England (BoE) decided just recently that it would not cut the interest rate below 0.10%. The central bank said that it could ramp up the asset purchases programme if needed.
The COVID pandemic has hit both the British and the Canadian economy. However, Britain seems to be more affected since it has more confirmed cases, while economic indicators don’t bring any hopes.
UK’s February Retail Sales Are Flat Y/Y
Earlier today, the Office for National Statistics (ONS) said that UK retail sales had shown last month the weakest performance in about seven years, even before retailers started to worry about the pandemic.
Retail sales were flat in February year-on-year, after an increase of 0.9% in January. Economists expected a slight contraction to 0.8%.
The last time when sales showed no growth was in March 2013, when the country saw the heaviest snowfall in three decades.
On Monday, the government led by Prime Minister Boris Johnson ordered that all non-essential stores halt their operations. Only supermarkets and some online shops are allowed as of today. The lockdown measures are not encouraging for retailers, even though the government is promising unprecedented support.
Thomas Pugh, an economist at Capital Economics, commented:
“People should brace for a eye-watering fall in retail sales in the region of 30% month-on-month in April. Retail sales may be flat in March as exceptionally strong food sales offset weakness elsewhere.”
Yesterday, the Confederation of British Industry said that retailers were ready to experience next month the largest decline in sales since April 2009.
According to ONS data, February sales fell 0.3% in monthly terms, after a surge of 1.1% in January. The bad weather also contributed to the decline.
Elsewhere, the Canadian dollar has been dragged down by tumbling oil prices at the start of the month, but the currency has managed to recover.