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GBP/CAD Slide Continues Unabated as BoE Leaves Interest Rates on Hold

Last week’s high: C$1.7563

Last week’s low: C$1.7227

Sterling Sentiment Suffers as Soft UK Data Causes BoE to Delay Rate Hike

The Pound suffered its fourth consecutive week of losses against the Canadian Dollar during last week’s session, with the pairing’s losses being mostly driven by the Bank of England’s (BoE) latest policy meeting.

The BoE voted 7-2 last week to leave interest rates on hold; a major blow to GBP investors who were certain as late as mid-April that the bank was on track for a rate hike this month.

Meanwhile soaring oil prices helped the Canadian Dollar extend its gains against the Pound last week, although an unexpected contraction in domestic employment last month saw the ‘Loonie’ trim some of these gains at the very end of the week.

CAD Outlook: Will Rising Wages Prompt a Rally in the Pound?

Looking ahead to this week’s session the GBP/CAD exchange rate may look to rally at the start of the week with the release of the UK’s latest employment figures.

Economists forecast that Tuesday’s labour report will reveal that UK wage growth continued to creep higher in March, with analysts optimistic that rising wages will help to fuel a rebound in the UK’s economic growth.

Meanwhile the focus for CAD investors will likely be on Canada’s latest CPI figures, with the Canadian Dollar likely to tick higher at the end of the week if inflation remains robust.

 

Key Events

15th May

09:30 UK Unemployment Rate (Mar)

09:30 UK Wage Growth (Mar)

16th May

01:30 CA Manufacturing Sales (Mar)

17th May

13:30 CA ADP Employment Change (Apr)

18th May

13:30 CA Inflation Rate (Apr)

13:30 CA Retail Sales (Apr)

 

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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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