The Pound Canadian Dollar (GBP/CAD) exchange rate firmed on Monday as oil prices fell to a one-year low.
At the time of writing, GBP/CAD was trading at around CA$1.6790, which was roughly up 0.3% from Monday’s opening levels.
The Canadian Dollar (CAD) retreated on Monday, as investors focused on oil market woes.
The trade week saw oil markets open at a one-year low as both supply and demand issues incited investor caution. At the time of writing WTI crude oil was trading at around $70 per barrel.
Analysts speculate that global demand is likely to grow weaker as most of the world’s major economies look set to slip into a recession at the start of 2023.
This was further compounded on Monday, when China began reporting a spike in Covid cases. Being crude’s biggest importer, investors were hopeful China’s reopening would increase oil demand. However, if China is forced to begin nationwide lockdowns again this could dent crude’s desirability.
On the issue of supply, Vladimir Putin has threatened to cut Russian oil supply in response to the EU price cap. This coupled with the shutdown of the Keystone pipeline in response to a leak kept oil markets downbeat on Monday, which weighed on CAD. 
The Pound (GBP) was up against the majority of its peers on Monday after the latest UK GDP figures were released.
Data published by the Office for National Statistics (ONS) reported the UK economy expectations by 0.5% in October beating forecasts for a 0.4% expansion.
The stronger-than-expected results appeared to breath some life into the Pound on Monday, although these gains were capped by concerns that the UK still faces a recession.
‘This tentative rebound from sharply falling GDP in September may look like a positive step back toward growth, but we should not get over-excited… The economy is no longer teetering on the edge of recession; it is fully in one. We are now feeling the pain of both relentless inflation and interest rate rises, which are both crippling business and household spending’.
Looking ahead, the Pound Canadian Dollar exchange rate will likely be driven by the Bank of England’s (BoE) interest rate.
The interest rate decision will be the highlight of the week for GBP Investors.
A 50bps rate hike is largely priced in by markets, leaving the focus on the BoE’s forward guidance for 2023. A cautious outlook from the bank could place some significant pressure on the Pound later in the week.
With this in mind, jobs data due on Tuesday might not impact Sterling’s movement as much. The UK’s unemployment rate is expected to rise from 3.6% to 3.7%. Whilst a rise in unemployment may further dent the UK’s economic outlook, financial headwinds could be offset by BoE expectations.
Turning to the Canadian Dollar, a lack of significant data will likely see the oil-linked ‘Loonie’ trade in relation to movements in the oil markets.
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Pound Canadian Dollar Exchange Rate News Outlook: GBP/CAD Climbs As Oil Prices Slump – Exchange Rates UK
