Last week’s high: C$1.7041
Last week’s low: C$1.6770
GBP/CAD Plunges on Impressive Canadian Data
The Pound to Canadian Dollar exchange rate saw largely flat trade last week, trending closely below the week’s opening levels due to a lack of market appetite for the Pound amid long-term concerns about Britain’s economic outlook during the Brexit process.
Last week’s only real major movement in GBP/CAD came right towards the end of the week, as Canada’s December job market report was published during Friday’s American session.
Canada’s participation rate rose from 65.7% to 65.8% but despite this the key unemployment rate unexpectedly dropped from 5.9% to 5.7%. This was especially impressive as the unemployment print was forecast to worsen to 6%.
The Canadian job market continued its surprisingly impressive trend throughout December as 78.6k new jobs were made, following November’s strong 79.5k and coming in far above the forecast 1k. This report boosted hopes that Canada’s economy was improving quicker than expected, which could help the Bank of Canada (BOC) ramp up the pace of its interest rate hike plans.
CAD Outlook: Can the Canadian Dollar Hold its Gains?
The Canadian Dollar saw strong performance at the end of last week, but its strong streak may not last, according to analysts.
According to a Reuters poll, the Canadian Dollar could weaken in the coming months due to perceived policy diversion between the Federal Reserve and Bank of Canada (BOC).
That said, recent Canadian data has been strong and continued strength in Canadian ecostats could boost the chances of more hawkishness from the bank in the coming year.
Next week’s data is unlikely to be as influential as last week’s, with the most notable Canadian ecostats being Thursday’s upcoming Canadian housing price index report.
As for UK data, next Wednesday’s UK trade deficit update could inspire Pound movement, but any developments in the UK government’s Brexit negotiation stance is more likely to affect Pound trade.
13:15 Canadian Housing Starts
09:30 UK Industrial and Manufacturing Production
09:30 UK Balance of Trade
13:00 UK NIESR Growth Estimate
13:30 Canadian New Housing Price IndexOK
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