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GBP/CAD Exchange Rate Rise Halted by DUP’s Brexit Blockade

Last week’s high: CA$1.7275

Last week’s low: CA$1.6856

Canadian Dollar Suffers Downturn despite Higher Oil Prices

The Pound Canadian Dollar exchange rate was on the up for the greater part of last week but was curtailed somewhat towards the end of the session when optimism regarding a Brexit breakthrough faded.

After a week of positive news regarding the UK’s future relationship with the EU, objections from the Democratic Unionist Party (DUP) over Theresa May’s ‘backstop’ plan threw a spanner into the works, causing the Pound to lose some of its weekly gains.

Furthermore, with the Canadian Dollar getting support from high oil prices for the greater part of the week’s session, a sharp drop in prices on Friday led to CAD weakness, although the Pound was not fully able to exploit this.

CAD Outlook: Inflation in Focus on Both Sides of the Atlantic

Looking ahead to this week’s session, the GBP/CAD exchange rate may find a rallying point in the week ahead if September’s Canadian inflation data disappoints.

The odds of the Bank of Canada (BoC) raising interest rates again in the immediate future will diminish sharply if inflation wobbles again.

Inflation will also be in focus when the latest UK consumer price index data comes out on Wednesday, with forecasts pointing towards another step up.

If inflation comes in as forecast and accelerates to 2.8% on the year this would give the Bank of England more cause for raising interest rates faster.

Nevertheless, any signs that UK wage growth is still struggling would leave the GBP/CAD exchange rate vulnerable to more losses in the week ahead.

 

Key Events

15th October

14:30 CA BoC Business Outlook Survey

16th October

09:30 UK Unemployment Rate (Aug)

09:30 UK Wage Growth (Aug)

17th October

09:30 UK Inflation Rate (Sep)

12:00 UK EU Summit

18th October

09:30 UK Retail Sales (Sep)

12:00 UK EU Summit

19th October

09:30 UK Public Sector Borrowing (Sep)

12:30 CA Retail Sales (Aug)

12:30 CA Consumer Price Index (Sep)

 

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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

aja@fcgworld.co.uk

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