GBP/CAD is extending its rally on Monday, after gaining over 3% on Thursday and Friday. Currently, GBP/CAD is trading at 1.7500, up 0.50% as of 10:45 AM UTC.
The Loonie is facing increased pressure from declining oil prices, as WTI futures have tumbled over 5% to about $20.
Mortgage Approvals Beat Expectations in February
The pound has been slightly pushed by positive housing market data, though it reflects the period before the coronavirus became a problem in the UK. The Bank of England (BoE) said earlier today that the number of mortgage approvals rose to a six-year high last month, to 73,546. Economists polled by Reuters expected an increase to 68,200.
At the beginning of the year, the British economy showed visible signs of acceleration after Prime Minister Boris Johnson’s major win in the December election. On a side note, the PM tested positive on for COVID-19 and has mild symptoms.
However, the housing market, along with other key industries, will likely experience a freefall after the British government imposed shutdown measures.
50% of British Citizens Expect Recession
A recent poll by YouGov showed that about half of Britons anticipate a recession, while about 20% expect an economic depression caused by the new coronavirus.
“Almost three quarters expect that Britain’s economy will be in depression (19%) or recession (52%) within a year,” the research firm said.
A minority of respondents, 28%, said the economy would grow in about a year and 1% said it would be booming. The participants of the poll responded between March 1 and 18.
Economists have already warned that the British economy is entering a recession period, and whether it will recover by the end of this year depends on how long the shutdown measures maintain.
Both the government and the BoE have implemented a series of stimulus measures to support the economy. Finance minister Rishi Sunak promised that the government would pay 80% of wages of those who cannot work for now but prefer to keep their jobs.
The central bank has cut interest rates to 0.1%, which is a record low. It also ramped up its quantitative easing programme.
