After rallying to its best levels since January last week, the GBP/CAD exchange rate is largely holding gains despite the recent confirmation of when Article 50 will be triggered.
With crude oil prices fluctuating, the Canadian Dollar has failed to undermine Sterling’s recent advance – but with some influential news on the calendar this week that could all change.
Last week saw the interbank Pound to Canadian Dollar exchange rate advance from 1.63 to close trading at 1.65 on Friday.
GBP Down from Best Levels against CAD ahead of Inflation Stats
The Pound has fallen marginally against the Canadian Dollar today, ahead of what may be a high-impact UK inflation announcement.
Despite the drop, Sterling remains close to the best rate seen in 2017 thanks to last week’s Bank of England (BoE) interest rate decision.
While the UK rate remained at 0.25%, BoE official Kristin Forbes unexpectedly voted for an interest rate hike.
The surprise 8-1 split in the Monetary Policy Committee (MPC) triggered a sharp Pound appreciation against the Canadian Dollar and led a number of economists to predict 2018 as the earliest date for a UK rate hike, up from previous estimates of 2019.
Notably, the GBP/CAD exchange rate was little changed on the news that Article 50 will be triggered on March 29th.
Canadian Dollar Appreciates after Forecast-Beating Sales Stats
The Canadian Dollar firmed slightly on Monday in the wake of the day’s domestic wholesale sales figures for January, which followed the precedent set by Friday’s manufacturing sales report and printed better than forecast.
A fractional advance in wholesale sales from 0.3% to 0.5% was forecast, making the actual 3.3% result a strong source of support for the Canadian Dollar.
GBP/CAD Exchange Rate Forecast
This week, Pound/Canadian Dollar exchange rate movement may occur as a result of UK inflation figures and retail sales stats.
An increase in annual inflation from 1.8% to 2.1% is forecast and this result could trigger a GBP CAD rally. This is on account of Forbes voting for a rate hike in response to rising inflationary pressures. In the months ahead, higher UK inflation could keep bolstering hopes of an earlier UK interest rate hike.
The also-impactful retail figures are expected to show an increase in consumer spending. If the data prints as expected, the Pound could adopt a stronger position going into the weekend.
Canadian economic news this week also includes retail sales and inflation numbers, as well as Wednesday’s federal budget announcement.
Sales are forecast to rise while monthly inflation is expected to drop; the deciding factor in the direction CAD takes could be the budget. This is expected to touch on uncertainty in the future Canada-US trade relationship and could boost CAD if it allays any concerns in this area.
2.1%