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GBP/CAD Exchange Rate Collapses on No-Deal Brexit Fears

Last week’s high: C$1.7610

Last week’s low: C$1.7340

Pound Plunges with No-Deal Brexit Risk

The Pound to Canadian Dollar exchange rate struck a 22-month low last week with a sharp sell-off in Sterling at the start of the session prompted by fears the UK government under Boris Johnson might put the country on a path to no-deal Brexit.

Also influencing Sterling last week was the Bank of England’s latest policy decision which saw the bank keep rates on hold while presenting lower growth forecasts for 2019.

Meanwhile, a sharp drop in oil prices tempered the Canadian Dollar’s gains last week with Brent crude falling as low as $60 a barrel.

CAD Outlook: Sterling to Extend Losses as UK Economy Stalls?

Looking ahead, we expect UK political headlines to continue to act as the main catalyst of movement in the Pound.

On top of this, Sterling must also grapple with the latest UK GDP figures, with GBP exchange rates likely to weaken if economic growth stalled as expected in the second quarter.

Meanwhile the focus for CAD investors next week will be on the publication of Canada’s latest employment report. A potential strengthening of the ‘Loonie’ can be anticipated if domestic employment began to accelerate again in July.

 

Key Events

5th August

09:30 UK Services PMI (Jul)

7th August

08:30 UK Halifax House Price Index (Jul)

15:00 CA Ivey PMI (Jul)

8th August

13:30 CA New Housing Price Index (Jun)

9th August

09:30 UK GDP (Q2)

09:30 UK Business Investment (Q2)

09:30 UK Industrial Production (Jun)

09:30 UK Trade Balance (Jun)

13:30 CA Employment Report (Jul)

 

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

Alastair Archbold
Currency Trader
T: 01442 892 066

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