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Canadian Dollar Recovers as BOC Governor Less Dovish than Feared

Yesterday’s high: C$1.6816

Yesterday’s low: C$1.6664

GBP/CAD Could Continue Falling on UK Political Fears

The Pound to Canadian Dollar exchange rate tumbled on Wednesday as investors became anxious about domestic political uncertainties in Britain.

Multiple high-ranking officials in the UK government have recently resigned from their posts due to scandal, causing fears that UK Prime Minister Theresa May’s position in Brexit negotiations could be undermined to rise.

The Canadian Dollar, on the other hand, has seen slightly stronger demand throughout the day as investors digested Tuesday’s comments from Bank of Canada (BOC) Governor Stephen Poloz.

Amid underwhelming domestic inflation stats over the last month, markets feared that Poloz would be more dovish than he was. Poloz took a neutral tone in his latest speech and remained confident that inflation would still hit the bank’s 2% target eventually.

Canada’s latest housing data beat expectations on Wednesday too, keeping the currency buoyed.

CAD Outlook: Brexit Talks to Influence GBP/CAD

Brexit negotiations between the UK and EU are due to resume before the end of the week, so any signs of progress in the process from Brussels is likely to lead to a jump in demand for the Pound.

On the other hand though, if Brexit talks appear to remain at a standstill, GBP/CAD could tumble as markets become more concerned about Britain’s position in talks.

Meanwhile, the Canadian Dollar is likely to be influenced by new house price data on Thursday. Shifts in the price of Canada’s most lucrative commodity, oil, could also influence the ‘Loonie’.

 

Key Events

9th November

13:30 Canadian New Housing Price Index

10th November

09:30 UK Balance of Trade

09:30 UK Manufacturing and Industrial Production

09:30 UK Construction Output

14th November

09:30 UK Inflation Rate

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To keep up to date with the Canadian Dollar, visit the CAD blog in our Currency News section.

Richard Beaumont
Currency Broker
T: +44(0)1442 892 060

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