Last week’s high: C$1.8082
Last week’s low: C$1.7819
Trade Hopes Keep Canadian Dollar (CAD) Appealing Versus Pound
While Bank of England (BoE) interest rate hike bets kept the Pound broadly strong last week, GBP/CAD ultimately ended the week below its opening levels due to Canadian Dollar strength.
Investors found the Canadian Dollar appealing due to rising market hopes that the US and China would rather negotiate trade issues than spark a trade war. On top of this, US officials seem increasingly optimistic that the North American Free Trade Agreement (NAFTA) will be successfully renegotiated.
Still, a lack of particularly strong Canadian data last week, as well as comments from officials suggesting that a NAFTA deal could still be a way away made it easier for GBP/CAD to recover on BoE hawkishness towards the end of the week.
CAD Outlook: Big Week for Canadian Data
The coming week could be pivotal for the Pound to Canadian Dollar exchange rate as major UK and Canadian data is due for publication, some of which could influence analyst expectations for UK and Canadian monetary policy.
Speaking of monetary policy though, perhaps the biggest event next week for GBP/CAD will be Wednesday’s Bank of Canada (BOC) policy decision.
While the bank is not expected to make any changes to Canadian monetary policy, any comments it makes on issues like the possibility of a trade war, or NAFTA negotiations, could influence the interest rate outlook for the rest of the year.
If the BOC takes an optimistic stance or Canadian retail and inflation data impresses next week, GBP/CAD could be in for another week of losses.
Markets are already confident that the Bank of England (BoE) will hike UK rates in May, but if next week’s UK data impresses it could still help the Pound to avoid major losses.
09:30 UK Job Market Report and Wage Growth
09:30 UK Jobless Claims
13:30 Canadian Manufacturing Sales
09:30 UK Inflation Rate
15:00 Bank of Canada (BOC) Policy Decision
09:30 UK Retail Sales
13:30 Canadian ADP Employment Change
13:30 Canadian Retail Sales
13:30 Canadian Inflation Rate
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Senior Currency Broker
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