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GBP/CAD Tumbles as Doubts Cast over May Rate Hike

Last week’s high: C$1.8055

Last week’s low: C$1.7761

Possible Delay to BoE Rate Hikes Drives Pound Lower

The Pound suffered heavy losses against the Canadian Dollar during last week’s session as Sterling was pressured by doubts whether the Bank of England (BoE) would commit to a rate hike next month.

This was the result of some lacklustre inflation figures from the UK on Wednesday and remarks from BoE Governor, Mark Carney warning the bank may choose to delay its plans to tighten monetary policy.

Meanwhile the Canadian Dollar was lent support this week by a sharp uptick in oil prices, which helped to buoy the crude-correlated currency.

However CAD still suffered some pressure during the session as a dovish rate decision from the Bank of Canada’s (BoC) caused the ‘Loonie’ to relinquish some of its gains on Wednesday, while weaker-than-expected inflation weighed on the currency on Friday.

CAD Outlook: UK GDP Figures may see Sterling Extend Losses

Looking ahead to this week’ session the Pound may continue to weaken with the release of the UK’s latest GDP figures, with economists forecasting that growth will have slowed from 0.4% to 0.3% in the first quarter.

Meanwhile a quiet session in terms of Canadian data may limit the Canadian Dollar’s attempts to advance this week, with momentum likely to be driven by movement in crude markets or progress in NAFTA negotiations.

Key Events

23rd April

11:00 UK CBI Industrial Orders (Mar)

26th April

11:00 UK CBI Distribute Trades (Mar)

27th April

00:00 UK Consumer Confidence (Apr)

09:30 UK GDP (Q1)

 

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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

Tel:  01442 892 066

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