As a new week of trading began the Pound registered modest gains against the Canadian Dollar after sliding last week in the face of surging oil prices.
Last week the GBP/CAD exchange rate dropped from 1.66 to 1.65.
Pound Advances as City of London Official Counters Financial Departure Fears
Despite limited UK data, the GBP CAD exchange rate still ticked higher on Monday.
Over the weekend, City of London policy official Mark Boleat stated that while some banking jobs would relocate to the continent after Brexit, it would not be the mass migration envisioned by some.
This has gone some way to counter concerns of the UK financial sector drying up due to Brexit uncertainties.
Canadian Dollar Dips on Business Leader Caution over Trump Trade
Despite the price of crude oil rising above $52 per barrel today, the Canadian Dollar has declined on uncertainty among CEOs about Donald Trump.
The US President’s changes to trade policy with Canada have still yet to fully materialise, but ahead of this a C-Suite survey has revealed some cause for concern.
53% of surveyed CEOs believed Trump would have a ‘somewhat negative’ influence of Canadian job creation. Additionally, a substantial portion of respondents gave the Trump administration a ‘poor’ rating for trade, foreign and immigration policy.
GBP/CAD Exchange Rate Forecast
This week, Pound/Canadian Dollar exchange rate movement may occur as a result of UK inflation data on Tuesday and jobs stats on Wednesday.
While these will be the only major UK data releases, they could cause large shifts in Pound demand.
Annual inflation is predicted to remain at 2.3% in March, above the BoE target of 2%. On the month, an easing in consumer price pressures from 0.7% to 0.3% is predicted.
Wednesday’s jobs stats will include unemployment and wage growth figures for February. The unemployment rate is predicted to remain at 4.7%. More notable will be the wage data; if inflation holds at 2.3% and average earnings stay below this figure then consumer spending could be stymied.
This could drag the Pound lower against the Canadian Dollar over the rest of the week. Over time, stagnant wage growth will have a negative impact on UK retail activity and raise the number of debt-burdened households.
Domestic housing data will be one of the main source of Canadian Dollar movement this week due to concerns relating to overheating housing markets in most major cities.
February’s new housing price index is predicted to show a monthly rise of 0.2%.
Although a Bank of Canada (BOC) interest rate decision and policy report are due on Wednesday, no rate change from 0.5% is forecast.
This leaves Thursday’s new housing price index as the strongest source of potential CAD movement.
Thursday’s other CA data (manufacturing sales) is expected to show a drop of -0.7%. Such a result could limit GBP/CAD losses.