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GBP/CAD Slumps as BoE Rate Hike Fails to Inspire Sterling

Last week’s high: C$1.7402

Last week’s low: C$1.7226

Pound Plunges as BoE Signals August Rate Hike Unlikely to be Repeated Any Time Soon

The Pound Canadian Dollar exchange rate tumbled to a new seven-month low last week following the Bank of England’s latest Policy meeting.

While the bank voted unanimously to raise interest rates this month, the move was undermined by Mark Carney’s accompanying comments as he warned Brexit uncertainty would likely prevent another hike from happening any time in the foreseeable future.

Meanwhile the oil-correlated Canadian Dollar firmed last week thanks to a sizable upswing in crude prices as well a greater-than-expected fall in the domestic trade deficit in June.

CAD Outlook: Will Rise in GDP Allow Sterling to Rally?

Looking ahead, the GBP/CAD exchange rate may look to rebound this week with the release of the latest UK GDP figures, with UK growth expected to have risen in the second quarter.

However with the GDP reading only coming at the very end of the week, the Pound may be left to drift lower through much of this session, especially if Brexit talks remain stalled.

Meanwhile a lull in notable data means movement in the Canadian Dollar is likely to be driven by NAFTA speculation this week, with any hints of progress likely to reflect well on the ‘Loonie’.

 

Key Events

7th August

15:00 CA Ivey PMI (Jul)

9th August

13:15 CA Housing Starts (Jul)

10th August

09:30 UK Industrial Production (Jun)

09:30 UK Trade Balance (Jun)

09:30 UK GDP (Jun)

09:30 UK GDP Estimate (Q2)

13:30 CA Employment Growth (Jul)

13:30 CA Unemployment Rate (Jul)

 

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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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