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.
13:30 CA New Housing Price Index
14:00 UK Bank of England (BoE) Andy Haldane Speech
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