GBP/CAD Touches Two-Month-Best on Brexit Speculation

Last week’s high: C$1.6481

Last week’s low: C$1.6094

Hopes for Bank of Canada (BoC) Resilience Fails to Keep Canadian Dollar High Versus Sterling

Last week was a heavily bullish one for the Pound to Canadian Dollar exchange rate. Sterling benefitted from relief that Britain was likely not headed for an imminent recession, as well as fresh hopes that the UK government could compromise and agree to a softer Brexit.

The Canadian Dollar has been fairly resilient lately due to hopes that the Bank of Canada (BoC) will avoid taking a dovish stance on monetary policy like other central banks. However, this was not enough to help CAD to avoid losses against a strong GBP throughout the week.

CAD Outlook: Poor Canadian Data Could Send CAD Plunging

The support around the Canadian Dollar could evaporate next week, if upcoming key Canadian data disappoints investors. If Canadian inflation and retail sales stats fall short, Bank of Canada (BoC) interest rate cut bets could revive and CAD could plunge.

Still, the Pound’s recent surge in demand may not last either, as uncertainties in UK politics and Brexit still dominate the GBP outlook. If upcoming developments worsen no-deal Brexit fears or UK data makes the Bank of England (BoE) more concerned about Britain’s economic outlook, the Pound could shed some recent gains.

Key Events

17th September

13:30 Canadian Manufacturing

18th September

09:30 UK Inflation Rate

13:30 Canadian Inflation Rate

19th September

09:30 UK Retail Sales

12:00 Bank of England (BoE) Policy Decision

20th September

13:30 Canadian Retail Sales

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