Last week’s high: C$1.7433
Last week’s low: C$1.7291
GBP/CAD Gains Limited by Brexit Jitters despite Canadian Dollar Plunge
If it wasn’t for some underwhelming Canadian data on Friday, the Pound to Canadian Dollar exchange rate may have seen much less movement last week.
Demand for the Pound was curtailed in the latter half of the week due to warnings by some major businesses over the potential impact a ‘no deal’ Brexit could have on UK jobs. JPMorgan has announced it will begin moving staff out of the UK in the coming months and Airbus has indicated it is also making plans for a worst-case-scenario outcome to Brexit negotiations.
Despite this, GBP/CAD was still able to advance before markets closed due to some concerning Canadian job stats.
While May’s Canadian employment change figure was better than expected, investors were spooked by an unexpected worsening of the unemployment rate from 5.8% to 6%
CAD Outlook: Bank of Canada’s July Decision in Focus
Despite investor disappointment in the latest Canadian jobs data, investors are still betting that the Bank of Canada (BoC) will hike Canadian interest rates during its anticipated July policy decision meeting next Wednesday.
The last interest rate hike was in January, and domestic economic strength has generally indicated to the bank that Canada can sustain higher rates.
The BoC decision will be the main economic event of the week for GBP/CAD investors, but developments regarding the US-China trade war will of course continue to influence the risky trade-correlated Canadian Dollar.
As for the Pound, most of the week’s notable UK data will be published on Tuesday. This includes Britain’s first monthly Gross Domestic Product (GDP) report, following a switch from quarterly figures. Brexit developments could also continue to keep pressure on the Pound.
09:30 UK Trade Balance
09:30 UK May GDP Growth Rate
09:30 UK Manufacturing and Industrial Production
13:15 Canadian Housing Starts
15:00 BoC Policy Decision
13:30 Canadian New Housing Price Index
12:00 BoE Cunliffe Speech
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