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GBP/CAD Rally Possible on BoE’s Haldane’s Speech

Yesterday’s high: C$1.6522

Yesterday’s low: C$1.6460

Pound Trades Higher despite Widening Trade Deficit

Yesterday saw the Pound make a small advance against the Canadian Dollar, although a sustained rally was prevented by mixed UK data.

In August, it was reported that the UK trade deficit had expanded from £-4.24bn to £-5.63bn, instead of reducing to £-2.80bn as forecast. This put the UK deficit at a 12-month high.

Additional concerns were raised by the balance of UK exports. Official data showed that the UK was exporting more to the EU and less to the rest of the world.

The UK’s good news was that in August, construction, industrial and manufacturing output rose, sparking hopes of a November Bank of England (BoE) interest rate hike.

Canadian data was largely disappointing – initial house construction printed lower in September, while a -5.5% drop in building permits was reported in August.

CAD Outlook: Pound may Turn Volatile on BoE Speech

This week is fairly quiet when it comes to economic news – the next UK event will be Thursday’s speech from Bank of England (BoE) official Andy Haldane.

In recent months, Haldane has supported a UK interest rate hike. If he hints at a rate hike as soon as November, the GBP/CAD exchange rate could rise sharply.

Outside of any crude oil price movements, the Canadian Dollar could also be affected by Thursday’s new housing price indexes.

Key Events

12th October

13:30 CA New Housing Price Index

14:00 UK Bank of England (BoE) Andy Haldane Speech

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

Richard Beaumont

Currency Broker
T: +44(0)1442 892 060

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