Last week’s high: CA$1.6362
Last week’s low: CA$1.6154
Canadian Dollar Sinks, UK Cross-Party Resistance to No-Deal Brexit Rises
The Pound opened last week up against the Canadian Dollar as the UK BBA mortgage approvals for July exceeded expectations, increasing from 42.775 thousand to 43.342 thousand – the highest level in two years.
Meanwhile, opposition leader Jeremy Corbyn increased pressure on Prime Minister Boris Johnson in an effort to prevent a no-deal Brexit on October 31, saying he would ‘do anything necessary’ for a new referendum or general election.
But mid-week saw the Pound fall against competitors following Johnson’s request to move the Queen’s speech. This effectively suspended parliament from mid-September until October 14, scuppering opposition plans to block a no-deal and increasing market jitters.
Elsewhere, US-China developments were largely responsible for Canadian Dollar movement. Positive rhetoric from China toward the end of the week gifted a boost to crude oil prices and a spillover benefit to the ‘Loonie’.
The GBP/CAD exchange rate edged higher towards the top of the week. Swelling cross-party opposition to Boris Johnson’s prorogation move saw MPs proposing legislative measures which could prevent both parliamentary suspension and a disorderly exit.
CAD Outlook: UK Political Developments to Remain in Spotlight
Canadian markets will be closed on Monday for the bank holiday, Labour Day.
Tuesday will then see a release of the Canadian and UK Markit Manufacturing PMI.
However, Canadian Dollar investors will be bracing for Wednesday’s interest rate decision from the Bank of Canada. The rate is expected to hold at 1.75% but any dovish signals from the central bank could see the CAD/GBP exchange rate sink.
The GBP/CAD exchange rate is likely to remain volatile next week, with Tuesday’s court hearings on Brexit and the parliamentary suspension firmly in focus for UK markets.
09:30 UK Markit Manufacturing PMI (Aug)
09:30 UK Markit Construction PMI (Aug)
14:30 Canadian Markit Manufacturing PMI (Aug)
09:30 UK Markit Services PMI (Aug)
15:00 BoC Interest Rate Decision
13:30 Canadian Unemployment Rate (Aug)