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GBP/CAD Could Fall Further if Brexit Concerns Persist

Yesterday’s high: C$1.7659

Yesterday’s low: C$1.7364

GBP/CAD Slips Despite Disappointing Canadian Data

Despite a lack of impressive Canadian ecostats in recent weeks, the Pound to Canadian Dollar exchange rate has been unable to advance as Brexit uncertainties and UK growth concerns weigh heavily on the Pound.

GBP/CAD trended over a cent below the week’s opening levels on Friday after EU chief negotiator Michel Barnier expressed uncertainty about Britain’s stances on key Brexit negotiation points. He indicated that if Britain did not agree to certain non-negotiable Brexit terms, it would put a Brexit transitionary deal at risk.

However, the Canadian Dollar failed to capitalise on Sterling’s Friday weakness due to market disappointment with Canada’s latest job market results.

In January, Canada’s key unemployment rate unexpectedly worsened from 5.8% to 5.9%. This was due to a -88k drop in employment. The participation rate also fell to 65.5% despite being predicted to come in at 65.7%.

CAD Outlook: Brexit News Could Keep Pressure on GBP/CAD

Could the Pound to Canadian Dollar exchange rate continue to fall despite poor Canadian ecostats? If next week’s Brexit developments or UK data disappoint it’s entirely possible that GBP/CAD could fall further.

Tuesday will see the publication of Britain’s January inflation results, with the UK’s retail sales report following on Friday. As the Bank of England (BoE) already expects inflation to remain high, a stronger than expected UK inflation report may not have much impact on the Pound outlook. Instead, investors will be focusing on Brexit developments and Britain’s stance on key negotiation issues.

Canada’s economic calendar will be quieter, but the Canadian Dollar could still be influenced by Friday’s manufacturing sales results and shifts in oil prices.

Key Events

13th February

09:30 UK Inflation Rate

15th February

13:30 Canadian New Motor Vehicle Sales

13:30 Canadian ADP Employment Change

16th February

09:30 UK Retail Sales

13:30 Canadian Manufacturing Sales

13:30 Canadian Foreign Securities Purchases

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

Alastair Archibold

Currency Dealer 

T: (0) 1442 892 066

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