GBP/CAD is about to end the week on a positive note, as the only session dominated by bears was on Thursday. Currently, the pair is trading at 1.7569, up 0.19% as of 12:20 PM UTC. So far, the price has gained over 1% for the week.
Yesterday, the Loonie was in a better position after the Bank of Canada (BoC) expressed hopes that its aggressive monetary easing measures, along with the government stimulus, would help the economy recover from the coronavirus crisis. BoC Governor Stephen Poloz said that the central bank was ready to boost the scale of its stimulus programs if needed.
On Wednesday, the BoC maintained the benchmark interest rate unchanged at 0.25% but expanded its quantitative easing initiative to address the negative effect of the pandemic and tumbling oil prices. Canada is an oil-dependent economy and might suffer from the recent price war escalated between Saudi Arabia and Russia. The two seemingly reached consensus on record oil production cuts during the OPEC+ meeting, but analysts warn that no intervention could offset the plunging oil demand.
Nevertheless, even if the BoC is confident about the recovery, Poloz admitted that the economy would need a couple of years to get back to where it was before the coronavirus. He said that Canada’s gross domestic product (GDP) might lose between 4% and 6% this year.
“I’m quite confident we will make up that lost ground but don’t hold me to a timeline. It’s going to take something that we measure in, say, a couple of years,” the governor said.
Sterling Bounced Back Even Stronger
The pound has recovered recent losses and continues to trade above a support line of an uptrend that started at the end of last week. Recently, Canada’s payroll services provider ADP said that the country lost 177,300 jobs last month, which included significant drops in trade, transportation, and utilities sectors.
Besides this, investors are worried that Brent and WTI futures are still trading very close to their weekly lows, which puts additional pressure on the Canadian dollar.
The sterling has managed to dominate the pair even though the British government extended the lockdown measures by three more weeks.