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Pound Struggles to Recover against Resurgent Canadian Dollar

Last week’s high: C$1.7690

Last week’s low: C$1.7330

GBP/CAD Tumbles on Bank of Canada (BoC) Bets and Canadian Growth Support

While some UK growth data did beat expectations last week, the Pound was ultimately unable to hold any recovery against a resurgent Canadian Dollar, and the Pound to Canadian Dollar exchange rate ended the week near its worst levels in a fortnight.

In the middle of the week, the Canadian Dollar was spurred higher by surging oil prices. Higher risk-sentiment and oil were, in the end, the primary causes of GBP/CAD losses throughout the week.

The Pound briefly mounted a recovery attempt on Friday when Britain’s quarter-on-quarter Q1 growth results beat forecasts. However, as Canada’s economy had also grown at a faster than expected pace in April the GBP/CAD rise was cut short and the pair ended up trending near its weekly lows.

CAD Outlook: PMIs and Canadian Job Market Stats Ahead

With key UK data due for publication throughout the first half of next week, the Pound is more likely to drive GBP/CAD exchange rate in the coming sessions.

Markit’s June UK PMIs will be published from Monday through Wednesday, with the key services and composite prints coming in on Wednesday morning. As services make up a notable chunk of Britain’s economic activity, this report could give investors a better idea of how Britain’s economy performed in the last month and could even impact Bank of England (BoE) interest rate hike bets.

However, the Canadian Dollar could keep pressure on Sterling throughout the week if oil prices remain strong and risk-sentiment continues to improve.

Most of the week’s most influential Canadian ecostats will be published on Friday. Canada’s trade balance results could indicate how much the nation has been impacted by US trade protectionism so far, and Canada’s job market data could also prove influential.

Key Events

2nd July

09:30 UK Manufacturing PMI

3rd July

09:30 UK Construction PMI

14:30 Canadian Manufacturing PMI

4th July

09:30 UK Services PMI

6th July

13:30 Canadian Balance of Trade

13:30 Canadian Job Market Report

15:00 Canadian Ivey PMI

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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 Dealer

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