GBP/CAD Soars to Best Post-Brexit Levels on US Trade Concerns
Last week’s high: C$1.8290
Last week’s low: C$1.7740
Weak Canadian Dollar Helps GBP/CAD Reach Best Levels since 2016
Despite Brexit uncertainties weighing on the Pound, the Pound to Canadian Dollar exchange rate saw major gains of over 4 cents last week and on Friday the pair trended near its best levels since the 2016 Brexit vote.
The Canadian Dollar was highly unappealing throughout the week due to concerns about US politics and US positions on trade. The US Presidential administration has seen a staff shakeup that reports suggest could continue, which has made risky currencies like CAD unappealing.
On top of this, the US Presidency has ramped up protectionist rhetoric on trade. The administration continued to hint that trade action could be taken against China, worsening fears of a possible ‘trade war’. Lastly, some analysts speculate that Ontario could be hit hardest if North American Free Trade Agreement (NAFTA) talks fall through.
Overall, it was a very bearish week for the Canadian Dollar.
CAD Outlook: Pound Investors Await Brexit Developments at EU Summit
GBP/CAD exchange rate movement could be driven by Sterling more next week, as investors are hoping for major Brexit developments during the week’s EU summit.
The summit will take place from the 22nd to the 24th of March and the UK government has remained confident that it can secure a post-Brexit transitional period at the summit.
If a transition deal agreement is reached, the Pound is likely to see stronger demand and GBP/CAD could see another week of gains. A lack of Brexit developments could cause GBP/CAD to shed some ground though.
Canadian Dollar trade, on the other hand, is likely to remain focused on US political and trade developments.
Major economic data due for publication next week could also influence GBP/CAD. This includes UK inflation and wage stats, as well as Canadian retail and inflation results.
09:30 UK Inflation Rate
12:30 Canadian Wholesale Sales
09:30 UK Job Market Report
09:30 UK Public Sector Net Borrowing
09:30 UK Retail Sales
12:00 Bank of England Policy Decision
18:45 Bank of Canada Wilkins Speech
12:30 Canadian Retail Sales
12:30 Canadian Inflation Rate
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