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GBP/CAD Exchange Rate Volatile as BoE Warns of Consequences of No-Deal Brexit

Last week’s high: C$1.7054

Last week’s low: C$1.6880

Pound Pressured by Dire Brexit Warns

The Pound Canadian Dollar exchange rate was hit by volatility last week as the Bank of England (BoE) release its Brexit analysis, with a warning that a no-deal Brexit could be hugely damaging to the UK economy.

This was followed by further comments from BoE Governor Mark Carney, who suggested the UK economy is ‘not ready’ for a disruptive exit from the EU.

Meanwhile the Canadian Dollar continued to be rocked by volatility in oil prices last week, with US crude prices stuck around a one-year low of $50 barrel.

The release of Canada’s GDP figures at the very end of the week finally allowed the ‘Loonie’ to stabilise however, as growth proved more robust in the third quarter than initially expected.

CAD Outlook: BoC Rate Decision in Spotlight

Looking ahead, the Bank of Canada (BoC) is expected to be in focus next week as it holds its December policy meeting.

While recent signals now suggest the BoC is unlikely to raise interest rates this month, economists remain optimistic about the prospect of a January hike, with the Canadian Dollar likely to accelerate if the bank’s forward guidance supports this speculation.

Meanwhile the Pound may be granted a brief respite from Brexit at the start of this week’s session with the publication of the UK’s latest PMI figures, with economists forecasting that growth in the UK’s private sector may have rebounded last month after a sharp slowdown in October.

 

Key Events

3rd December

09:30 UK Manufacturing PMI (Nov)

14:30 CA Manufacturing PMI (Nov)

4th December

09:30 UK Construction PMI (Nov)

5th December

09:30 UK Services PMI (Nov)

15:00 CA BoC Rate Decision

6th December

13:30 CA Trade Balance (Oct)

15:00 CA Ivey PMI (Nov)

7th December

09:30 UK Consumer Inflation Expectations (Q4)

13:30 CA Unemployment Rate (Nov)

13:30 CA Employment Change (Nov)

 

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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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