Last week’s high: C$1.6957
Last week’s low: C$1.6799
Canadian Dollar’s Strong Streak Continues Thanks to Surge in Oil Prices
While likely temporary, a surge in oil prices kept the Canadian Dollar climbing against the Pound last week.
The Canadian Dollar became more appealing after two oil tankers were allegedly attacked in the Gulf of Oman. The attacks made markets anxious about oil supplies and oil prices spiked.
However, analysts note that oil demand has recently been weaker overall, meaning that oil price gains have been volatile and could fall again when things calm down.
While the Canadian Dollar was supported by oil prices and hopes for continued trade relations between the US, Mexico, and Canada, the Pound was unable to hold its ground due to political uncertainties.
The Conservative Party leadership contest formally began, and the first round saw frontrunner Boris Johnson perform even more strongly than expected. Sterling was supported as bets on the next leader strengthened, but Johnson’s harder Brexit rhetoric is limiting the British currency’s appeal.
CAD Outlook: Oil Prices and Central Bank Speculation in Focus
As analysts predict that oil prices could soon fall again, the oil-correlated Canadian Dollar may struggle to hold its ground this week.
US trade concerns will increase towards the end of the month as the G20 summit approaches, meaning the Canadian Dollar’s appeal may also be limited by market trade aversion.
With Pound investors focused on the Conservative Party leadership contest though, the Canadian Dollar is still likely to drive GBP/CAD in the coming week.
Canadian manufacturing sales will be published on Tuesday, followed by inflation data on Wednesday. If Canada’s inflation falls short of expectations, the Bank of Canada may have less room to maintain its recent cautiously hawkish tone. This would weaken CAD.
Thursday’s Bank of England policy decision and Friday’s Canadian retail sales data could also prove influential.
13:30 Canadian Manufacturing Sales
09:30 UK Inflation Rate
13:30 Canadian Inflation Rate
09:30 UK Retail Sales
12:00 Bank of England Policy Decision
13:30 Canadian ADP Employment Change
09:30 UK Public Sector Net Borrowing
11:00 UK CBI Industrial Trends Orders
13:30 Canadian Retail Sales
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Foreign Exchange Manager