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Surging Oil Prices Fail to Stop GBP/CAD Exchange Rate Rise

Last week’s high: C$1.6927

Last week’s low: C$1.6608

Relief over US-Canada Trade Deal Fails to Buoy Canadian Dollar for Long

The Canadian Dollar saw a solid boost at the start of the week after confirmation that the US and Canada had agreed on a replacement for NAFTA and oil prices shot up over the week.

However, CAD exchange rates struggled to hold onto these gains for long as the odds of another 2018 Federal Reserve interest rate hike rose.

A sharp slowdown in the Ivey PMI undermined confidence in the health of the Canadian economy, meanwhile.

As the index slumped from 61.9 to 50.4, falling into a state of near-stagnation, the mood towards the Canadian Dollar soured.

A surprise weakening of hourly earnings in September put further pressure on CAD exchange rates on Friday, even as the labour market showed fresh signs of tightening.

CAD Outlook: Canadian Dollar Looks for Support from Housing Data

As Canadian data is a little thinner on the ground this week the Canadian Dollar may struggle to return to a stronger footing.

Even so, if August’s building permits and new housing price index figures show any improvement this could boost CAD exchange rates.

Signs of resilience within the Canadian housing market would give investors cause for confidence, even in the face of rising market risk aversion.

Wednesday’s round of UK data could give the GBP/CAD exchange rate a fresh leg up, meanwhile, providing the monthly gross domestic product points towards stronger growth.

Key Events

10th October

09:30 UK Gross Domestic Product

09:30 UK Trade Balance

13:30 Canada Building Permits

11th October

13:30 Canada New Housing Price Index

 

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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

aja@fcgworld.co.uk

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