Last week’s high: C$1.7147
Last week’s low: C$1.6781
Canadian Dollar Tumbles as NAFTA Concerns Take Hold
The Pound to Canadian Dollar exchange rate was able to close last week on a high.
While traders had little reason to buy the Pound amid Brexit concerns and mixed UK ecostats for the first half of the week, the British currency advanced as the Canadian Dollar tumbled against most major rivals.
Canada’s latest ecostats were relatively unimpressive, with building permits falling -7.7% in November and November’s housing price index remaining at 0.1% rather than the forecast 0.2%. However, one of the biggest causes of CAD losses last week was speculation that the US could pull out of the North American Free Trade Agreement.
GBP/CAD extended its weekly gains on Friday afternoon, when the latest US inflation data impressed, leading to higher Federal Reserve interest rate hike bets and weighing on market appetite for risky currencies like the Canadian Dollar
CAD Outlook: Bank of Canada (BOC) Decision Ahead
Concerns about the future of the North American Free Trade Agreement (NAFTA) will likely continue to weigh on the Canadian Dollar over the coming week, but the currency may find some support if the Bank of Canada (BOC) takes a hawkish stance in its upcoming monetary policy decision.
The BOC’s first policy decision of 2018 will be held during Wednesday’s American session. Recent Canadian retail and inflation data has impressed, so markets are hoping that the bank could take a more hawkish tone towards interest rates and hint that its rate hike cycle will continue in the coming months.
However, the bank may also express concerns over NAFTA, which could counteract the impact of any hawkish commentary.
BOC news is likely to be the primary cause of GBP/CAD movement in the coming week, but if UK inflation data surprises investors on Tuesday this could influence the Pound.
09:30 UK Inflation Rate
15:00 Bank of Canada (BOC) Policy Decision
13:30 Canadian ADP Employment Change
09:30 UK Retail Sales
13:30 Canadian Manufacturing Sales
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