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GBP/CAD Exchange Rate Driven Higher as Oil Price Craters

Last week’s high: CA$1.7243

Last week’s low:  CA$1.6988

Pound Finds Strength against CAD

The Pound spent the first half of last week trading in a narrow band against the Canadian Dollar, but appreciated steadily in the second half on hopes that a Brexit deal between the UK and the EU may be imminent.

Bank of Canada governor Stephen Poloz gave an upbeat speech which talked up the Canadian economy, but the improved sentiment didn’t last long in the face of steeply declining oil prices pulling down CAD.

The price of WTI crude slumped below $60 towards the end of the week, displaying a record losing streak from its recent highs of around $75 a barrel.

At the same time Brexit optimism was pushed up a notch last week as The Times reported a ‘secret’ customs agreement with the EU. This was followed up by a nod and wink in the form of a verbal ‘thumbs up’ from Brexit Secretary Dominic Raab following a cabinet meeting, sending GBP rates rocketing to some of their highest levels in months.

The week was capped off with some Sterling-positive news in the form of the UK’s latest GDP figures, with Q3 printing at 0.6% compared to Q2’s 0.4%.

CAD Outlook: Quiet Data Week to Leave Sterling in the Driving Seat

This week is a quiet one in terms of Canadian data releases, meaning GBP/CAD traders will likely be focusing on the September’s UK earnings figures. If the sturdy wage growth seen in August has continued into September we could see some GBP/CAD gains tomorrow.

Following on from that, Wednesday will see the release of the latest CPI figures and other inflation statistics, meaning the focus this week is likely to be on UK consumers’ spending power.

Nevertheless, Sterling sentiment this week is again likely to be driven by headlines and political events – and perhaps we will get to find out whether those hints about an ‘imminent Brexit deal’ are true or not.

 

Key Events

13th November

09:30 UK Unemployment Rate (Sep)

09:30 UK Wage Growth (Sep)

14th November

09:30 UK Inflation Rate (Oct)

15th November

09:30 UK Retail Sales (Oct)

13:30 CA ADP Employment Change (Oct)

16th November

13:30 CA Manufacturing Sales (Sep)

 

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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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