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GBP/CAD Touches Multi-Year Lows as CAD Rally Continues

Last week’s high: C$1.6415

Last week’s low: C$1.6323

Canadian Dollar Continues to Climb Despite Bank of Canada Comments

The GBP/CAD exchange rate spent much of last week trading at some of its worst levels since 2017.

The Pound did derive a bit of support from the Bank of England’s (BoE) latest financial stability report, in which the bank indicated that Britain’s banking and financial systems would survive a no-deal Brexit.

Still, no-deal Brexit fears ultimately prevented Sterling gains.

While the Bank of Canada (BoC) disappointed some investors last week by taking a more cautious tone on monetary policy, it still was less dovish than most major Central Banks.

This, as well as strength in oil prices and a more dovish Federal Reserve, left the trade-correlated Canadian Dollar strong and helped it hit fresh highs.

CAD Outlook: Bank of Canada (BoC) Remains in Focus

The coming week is likely to be another big one for Canadian Dollar investors, as there are multiple major Canadian ecostats due for publication throughout the week.

However, if upcoming Canadian data is particularly disappointing, it could lead to uncertainty over the BoC outlook, which could in turn lead to CAD losses.

Canadian inflation data on Wednesday and retail sales stats on Friday are likely to be particularly influential. If Canadian price pressures were weaker than expected in June, speculation of a BoC rate cut could rise.

The Pound, on the other hand, will become more focused on developments in UK politics and Brexit, as the coming week will be the final full week for the Conservative Party’s leadership contest.

Key Events

15th July

13:30    Canadian New Motor Vehicle Sales

16th July

09:30    UK Job Market Report

13:30    Canadian Foreign Securities

17th July

09:30    UK Inflation Rate

13:30    Canadian Inflation Rate

13:30    Canadian Manufacturing Sales

18th July

09:30    UK Retail Sales

13:30    Canadian ADP Employment Change

19th July

09:30    UK Public Sector Net Borrowing

13:30    Canadian Retail Sales

 

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

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