Friday’s high: C$1.6775
Friday’s low: C$1.6636
Canadian Dollar Fails to Hold Ground against Stronger Sterling
Towards the end of last week, risk-sentiment faded as oil prices dropped from their highs and investors became uncertain about the US tax reform outlook. This made risk-correlated currencies like the Canadian Dollar relatively unappealing.
This meant easy gains for the Pound, which strengthened on Friday following a Brexit press conference from UK Brexit Secretary David Davis and EU chief negotiator Michel Barnier.
While Barnier repeated that the UK side needed to offer more concessions before things could proceed and Davis repeated that the EU side needed to be more flexible, there were indications that progress was being made.
Barnier indicated that if the UK offered concessions in the next two weeks, it was much more likely that Brexit negotiations could see major progress in December. This boosted hopes that the first phase of negotiations will soon conclude.
CAD Outlook: Inflation Stats Due This Week
While it’s unlikely there will be much Brexit development this week, the Pound to Canadian Dollar exchange rate could still see some volatility depending on key Consumer Price Index (CPI) stats.
UK inflation data will be published on Tuesday, which could cause some Bank of England (BoE) policy speculation if it surprises. Pound traders will also be focused on Wednesday’s wage data.
Canada’s inflation data, due Friday, will also be influential though. As the Bank of Canada’s (BOC) recent ‘wait and see’ stance has been due to underwhelming inflation, signs that underlying consumer price pressures will rise in the coming months would likely lead to a stronger Canadian Dollar.
09:30 UK Inflation Rate
09:30 UK Job Market Report
09:30 UK Retail Sales
13:30 Canadian Manufacturing Sales
09:30 UK Public Sector Net Borrowing
13:30 Canadian Inflation Rate
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