Last week’s high: C$1.6413
Last week’s low: C$1.6167
Retail Sales Slump Dents CAD Exchange Rates
A surprise contraction in Canadian retail sales defied forecasts of a modest acceleration on the month and saw CAD exchange rates falter ahead of the weekend.
This latest sign of weakening confidence within the Canadian economy left the Canadian Dollar on a weaker footing against its rivals, particularly in the face of wider market risk aversion.
As oil prices dropped in response to the latest escalation in tensions between the US and Iran this put additional pressure on CAD exchange rates.
The odds of the Bank of Canada (BOC) shifting towards a more dovish policy outlook also increased after the annual inflation rate dipped from 2.4% to 2.0% in June.
The GBP/CAD exchange rate struggled to capitalise on the relative softness of the Canadian Dollar, however, thanks to the latest bout of Brexit-based anxiety.
With government borrowing found to have risen further than forecast last month the UK economy appears at even greater risk from the possibility of a no-deal exit.
CAD Outlook: Market Anxiety Set to Limit Canadian Dollar Support
A lack of fresh Canadian data could keep CAD exchange rates under pressure over the course of the week, particularly if oil prices fail to recover.
As long as geopolitical anxiety keeps the oil market on a negative bias the Canadian Dollar may struggle to find any particular traction against its rivals.
However, if the latest budget figures look set to deliver a surplus this could encourage investors to buy back into the weakened Canadian Dollar.
The GBP/CAD exchange rate is likely to see fresh volatility as reaction to the result of the Conservative leadership contest unfolds.
Unless the new Conservative leader shows signs of moderating their stance on Brexit the mood towards the Pound could deteriorate further.
Fresh declines in the latest CBI business optimism and industrial trends indexes could equally dent the GBP/CAD exchange rate.
11:00 UK CBI Business Optimism Index
11:00 UK CBI Industrial Trends Index
11:00 UK CBI Reported Retail Sales
16:00 Canada Budget Balance
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Foreign Exchange Manager