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Will GBP/CAD Drop on Bank of Canada Rate Hike?

Last week’s high: C$1.8560

Last week’s low: C$1.8240

Pound to Canadian Dollar Exchange Rate Losses Seen on Brexit Uncertainty

Proving that Brexit fears will always threaten the GBP/CAD exchange rate, the Pound posted steady losses last week despite initially supportive data.

There was news that UK wage growth accelerated by more than forecast, but later disappointment came from poor inflation and sales figures, alongside fears of a no-deal Brexit after an unproductive EU summit.

The Canadian Dollar steadily advanced against the Pound, with hopes for a Bank of Canada (BoC) interest rate hike lending support.

CAD Outlook: Risk of GBP/CAD Losses on BoC Interest Rate Hike

This afternoon’s Canadian wholesale sales figures could cause immediate CAD/GBP exchange rate gains, should they reveal a sharp rise in August.

The week’s only major UK data might cause Pound Sterling losses, as both ecostats are forecast to print negatively.

A forecast-matching drop in business optimism and negative industrial orders reading on Tuesday is unlikely to do much in the way of inspiring confidence among Pound traders.

The main event is Thursday’s Bank of Canada interest rate decision, which analysts believe will result in a rate hike from 1.5% to 1.75%.

Although this is the expected outcome, a BoC rate hike could push the Canadian Dollar up against the Pound.


Key Events

22nd October

13:30 CA Wholesale Sales

23rd October

11:00 UK Confederation of British Industry Business Optimism

11:00 UK Confederation of British Industry Industrial Orders

24th October

15:00 CA Bank of Canada Interest Rate Decision

16:15 CA Bank of Canada Press Conference

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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

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