Last week’s high: C$1.7469
Last week’s low: C$1.7205
Pound Fails to Hold Best Levels despite Canadian Jobs Market Misses
The Pound to Canadian Dollar exchange rate put in gains last week, but was unable to hold its best levels as Brexit uncertainties persisted and limited Pound demand towards the end of the week.
Sterling had previously been able to climb against the Canadian Dollar due to solid UK ecostats and higher Bank of England (BoE) interest rate hike bets. The Canadian Dollar’s appeal was weighed heavily towards the end of the week by market concerns about NAFTA renegotiations and US President Donald Trump’s persistently protectionist stances on global trade.
However, while Canada’s May jobs market report disappointed investors on Friday, GBP/CAD still fell from its best levels. This was because the UK government’s proposed post-Brexit backstop plan was disregarded by EU Chief Negotiator Michel Barnier.
CAD Outlook: Markets Focus on UK Price Pressures and Global Trade Jitters
This week will be a lot quieter in terms of Canadian data, but if investors remain anxious about the possibility of NAFTA talks collapsing or a US-sparked trade war then investors are likely to overlook Canada’s domestic news regardless.
If trade uncertainties continue to hit headlines and investors hesitate to buy risky trade-correlated currencies, the Pound to Canadian Dollar exchange rate could more easily register another week of gains.
However, if Britain’s upcoming wage growth or inflation results disappoint investors it could cause Bank of England (BoE) interest rate hike bets to fall.
Lower BoE bets, on top of persistent Brexit jitters, would keep pressure on GBP/CAD. Of course, strong UK wages or inflation stats could have the opposite effect and help to boost the Pound to Canadian Dollar Exchange Rate.
09:30 UK Balance of Trade
09:30 UK Manufacturing and Industrial Production
09:30 UK Job Market Report
09:30 UK Inflation Rate
09:30 UK Retail Sales
13:30 Canadian New Housing Price Index
13:30 Canadian Manufacturing Sales
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