Last week’s high: C$1.7707
Last week’s low: C$1.7383
Canadian Dollar Holds Gains Against Weak Pound as Oil Prices Rise
Despite a surprise deepening in Canada’s trade deficit in March, the Canadian Dollar remained sturdy enough at the end of last week to hold its gains against a weak Pound.
GBP/CAD fell at the beginning of the week as UK PMI data indicated that Britain’s economy was still performing weaker than expected at the beginning of Q2 2018. With Bank of England (BoE) interest rate hike bets for May now essentially off the table, investors had little reason to buy the Pound.
The Canadian Dollar was able to hold its best levels against Sterling due to a solid Canadian growth report from February, as well as stronger oil prices.
Canada’s economy grew at 0.4% in February, beating the forecast 0.3%.
Prices of oil, Canada’s most lucrative commodity, saw strong performance towards the end of the week which also helped to support the commodity-correlated Canadian Dollar.
CAD Outlook: Bank of England and Canadian Job Results Next Week
The Canadian Dollar may be able to keep gaining against the Pound in the coming week if Canadian ecostats continue to impress, especially if global trade developments make risky commodity correlated currencies like the Canadian Dollar more appealing.
Investors will be focused on continued developments on trade between the US and China, as well as potential progress on NAFTA renegotiations.
As for data, the most influential Canadian data due for publication next week will be the nation’s April job market results, due on Friday.
The Pound, on the other hand, will react to the tone the Bank of England (BoE) takes in its May policy decision on Thursday. The bank is no longer expected to hike UK interest rates, and if policymakers show a notable shift towards dovishness the Pound is likely to see another week of poor performance.
13:15 Canadian Housing Starts
13:30 Canadian Building Permits
09:30 UK Industrial and Manufacturing Production
09:30 UK Balance of Trade
12:00 Bank of England Policy Decision
13:00 UK NIESR GDP Estimate
13:30 Canadian New Housing Price Index
13:30 Canadian Job Market Report
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