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GBP/CAD Fluctuates as Oil Rises, UK Pay Squeeze Ends

Last week’s high: C$1.7402

Last week’s low: C$1.7226

Canadian Dollar Buoyed by Soaring Oil Prices

The Pound Canadian Dollar exchange rate experienced volatility this week amid a jump in oil prices which saw Brent crude break past $80 a barrel, lending support to the ‘Loonie’.

Also driving movement in the pairing this week was the publication of the UK’s latest labour figures, with an end to a year-long pay squeeze granting some brief gains for the Pound before Brexit uncertainty undermined the currency in the second half of the week.

Meanwhile, a surprise contraction in Canada’s core retail sales growth in March saw CAD fall back on Friday despite some robust inflation figures.

CAD Outlook: Will Uptick in UK Inflation Boost Sterling?

Looking ahead to this week’s session the main source of movement in the GBP/CAD exchange rate is likely to be the publication of the UK’s latest CPI figures.

This could prompt an uptick in the Pound if an acceleration in inflation bolsters the odds of a rate hike from the Bank of England (BoE) by the end of 2018.

Meanwhile, it’s set to be a quiet session in terms of Canadian economic data this week, which may see momentum in the Canadian Dollar to continue to be driven by oil prices.

Key Events

22nd May

09:30 UK Public Sector Borrowing (Apr)

11:00 UK CBI Industrial Orders (May)

13:30 CA Wholesale Sales (Mar)

23rd May

09:30 UK Inflation Rate (Apr)

11:00 UK CBI Distributive Trades (May)

24th May

09:30 UK Retail Sales (Apr)

25th May

09:30 UK GDP 2nd Estimate (Q1)

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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
T: 01442 892 066

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