Last week’s high: C$1.7499
Last week’s low: C$1.7322
Canadian Dollar Slumps after BoC Drops Interest Rate Hike Reference
The mood towards the Canadian Dollar soured significantly in the wake of the Bank of Canada’s (BoC) April policy decision.
Although interest rates were left on hold, as expected, investors were caught off guard by the BoC dropping its previous reference to future interest rate hikes.
With the central bank now on a firmly neutral policy outlook CAD exchange rates were left to trend lower across the board on Wednesday.
This diminished the impact of oil prices climbing to a fresh 2019 high earlier in the week, with global supply looking set to diminish.
Confidence in the Pound, meanwhile, remained muted in spite of UK mortgage approvals jumping to a surprise nine-month high.
CAD Outlook: Slowing Growth to Weigh Down Canadian Dollar
February’s Canadian gross domestic product data could put additional pressure on CAD exchange rates on Tuesday.
Forecasts point towards growth easing from 0.3% to just 0.1% on the month, demonstrating a loss of momentum within the domestic economy.
With the BoC already adopting a less hawkish policy outlook any fresh signs of a weakening economy are likely to weigh heavily on the Canadian Dollar.
However, the GBP/CAD exchange rate may struggle to take advantage of any underwhelming growth data for long.
Ahead of Thursday’s Bank of England (BoE) policy announcement investors may see limited incentive to favour the Pound.
Even though the BoE looks set to leave interest rates on hold for some months to come any fresh signs of caution among policymakers could see the GBP/CAD exchange rate slump.
00:01 UK GfK Consumer Confidence Index
13:30 Canada Gross Domestic Product
09:30 UK Manufacturing PMI
14:30 Canada Manufacturing PMI
12:30 Bank of England Rate Decision
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Foreign Exchange Manager