Last week’s high: C$1.7732
Last week’s low: C$1.7429
Pound Capitalises on Canadian Dollar Weakness Due to Bank of England (BoE) News
Last week was a good week for the Pound, and a bad week for the Canadian Dollar. While earlier in the week, the Pound was weakened by Brexit jitters and the Canadian Dollar was strengthened by higher oil prices, demand for both currencies turned around and GBP/CAD put in solid gains.
On Thursday, the Bank of England (BoE) held its June policy decision meeting and more members of the Monetary Policy Committee (MPC) than expected voted to hike UK interest rates. With a tighter-than-expected vote of 6-3 to keep rates frozen, the Pound saw a surge in demand.
Friday’s Canadian data made it even easier for the Pound to Canadian Dollar exchange rate to climb, as Canada’s latest key data came in well below expectations. Canada’s inflation and retail sales results fell short in every notable print, causing concerns that that Bank of Canada (BoC) may not be as confident about tightening Canadian monetary policy in the coming months as expected.
CAD Outlook: Latest UK and Canadian Growth Figures due Next Week
Next week’s economic calendar will be quieter for the most part, at least until Friday’s key UK and Canadian growth stats are published.
Early in the week, central bank news is likely to drive the Pound to Canadian Dollar exchange rate. Bank of England (BoE) Governor Mark Carney will hold a speech on Wednesday morning, followed by another from Bank of Canada (BoC) Governor Stephen Poloz during Wednesday’s American session.
In particular, Poloz’ reactions to last week’s disappointing Canadian inflation and retail sales stats could influence Canadian Dollar trade.
Sterling trade is most likely to be affected by next Friday’s UK growth report. If it impresses, Sterling could strengthen as investors would become more confident that the Bank of England could hike UK interest rates as soon as August.
09:30 BoE Governor Carney Speech
20:15 BoC Governor Poloz Speech
00:01 UK Consumer Confidence
09:30 UK Growth Rate
09:30 UK Mortgage Lending and Approvals
09:30 UK Business Investment
13:30 Canadian Growth Rate
If you need to make a CAD transfer but don’t have an account with us, click here to get started.