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GBP/CAD Slumps as UK Data Raises Doubts over BoE Rate Hike

Last week’s high: C$1.7402

Last week’s low: C$1.7226

Sterling Sentiment Sours on Gloomy UK Data

The Pound Canadian Dollar exchange rate was hit with heavy losses last week, falling as much as two cents at times following a run of weak data from the UK.

This included the UK’s latest wage growth, inflation and retail sales figures, all of which printed lower than expected and cast doubts on whether the Bank of England (BoE) would still be willing to push forward with a rate hike in August.

However, it was a twin pronged assault on the Pound last week, with the UK’s political turmoil and growing divisions in the Conservative Party also pressuring the GBP/CAD exchange rate.

Meanwhile the Canadian Dollar surged higher at the tail end of last week’s session, with a stronger-than-expected lift in Canadian inflation and retail sales helping to buoy the currency on Friday.

CAD Outlook: Will Uptick in UK Inflation Boost Sterling?

Looking ahead, a lull in high-impact data this week may see movement in the GBP/CAD exchange rate driven by political sentiment.

This could see Brexit take centre stage once again, with the Pound sliding if markets continue to raise concerns about the lack of progress in talks.

Meanwhile the Canadian Dollar may see its movement driven by political developments in the US, with the ‘Loonie’ potentially sliding if there is any more protectionist rhetoric from Trump, thus weakening hopes that NAFTA negotiations will be successful.

Key Events

23rd July

13:30 CA Wholesale Sales (May)

24th July

11:00 UK CBI Business Optimism (Q3)

11:00 UK CBI Industrial Orders (Jul)

25th July

11:00 UK CBI Distributive Trades (Jul)

27th July

07:00 UK Nationwide House Price Index (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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