Last week’s high: CA$1.7514
Last week’s low: CA$1.7055
Canadian Dollar Weighed Down by US-Sino Tensions and Poor Retail Sales
Last Tuesday the Pound Canadian Dollar (GBP/CAD) exchange rate rallied as employment in the UK reached a record high and the number of people looking for work fell to 4%, a 40-year low. Wage growth in the UK exceeded forecasts, growing by 3.4%, including bonuses.
US-Sino tensions likely contributed to the Canadian Dollar slipping, as the US Department of Justice confirmed they were pursuing the extradition of Meng Wanzhou, Chief Financial Officer of Chinese tech giant, Huawei.
Following the release of the Canadian retail sales figures the pairing continued to rise, as sales fell further-than-expected, sliding by 0.9%, with Statistics Canada reporting:
‘Lower sales at gasoline stations and motor vehicle and part dealers. Excluding these two subsectors, retail sales increased by 0.2%’
The ‘Loonie’ was able to regain some of its losses on Friday as reports emerged that the UK’s Democratic Unionist Party (DUP) would support Theresa May’s Brexit ‘Plan B’ on the condition that the Irish backstop is time-limited, although comments from the European Union on Thursday suggest this would not be possible.
CAD Outlook: Will a Rejection of ‘Plan B’ Bolster CAD?
The start of this week’s session will see the UK Parliament vote on Theresa May’s ‘Plan B’, which could cause a significant movement in the Pound Canadian Dollar (GBP/CAD) exchange rate. If the plan is rejected and a no-deal Brexit becomes increasingly likely it could see the Canadian Dollar make gains.
Thursday afternoon will see the release of Canada’s Gross Domestic Product (GDP) for November; if this figure falls below the previous reading of 0.3% it could see the ‘Loonie’ slip against the Pound.
There will also be a Bank of Canada (BoC) speech from Carolyn Wilkins, Senior Deputy Governor, and depending on whether her tone is dovish or hawkish, this could cause CAD movement.
This week’s session will end with the release of the UK’s Markit manufacturing PMI for January, with the forecast predicting that manufacturing growth will have slowed, which could see the Sterling end the session undermined against the ‘Loonie’.
n/a GBP UK Parliamentary Vote on Brexit ‘Plan B’
09:30 GBP Mortgage Approvals (Dec)
13:30 CAD GDP (Nov)
17:30 CAD BoC Wilkins Speech
09:30 GBP Markit Manufacturing PMI
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Foreign Exchange Manager