GBP/CAD Exchange Rate Pressured by Mixed UK Data, Impressive Canadian Inflation
The Pound Sterling Canadian Dollar (GBP/CAD) exchange rate struck a fresh nine-month low last week as some middling UK data filed to offset a surge in Canada’s latest inflation reading
The largest sell-off came on Tuesday as Sterling came under pressure due to some weak wage growth figures while the Canadian Dollar (CAD) was lifted by a surge in crude prices.
Fortunately for GBP investors the pairing was able to rally in the middle of the week with the Pound being buoyed by some stronger-than-expected retail sales figures, while the ‘Loonie’ was pressured by delays to the Keystone XL oil pipeline between Alberta and Nebraska.
However this recovery was cut short on Friday, with the GBP/CAD exchange rate plummeting around a cent as Canada’s latest CPI figures showed domestic inflation soared from 2.5% to 3% in July.
This smashed expectations for an unchanged reading and led to a sharp rise in Bank of Canada (BoC) rate hike speculation.
Pound Sterling (GBP) Exchange Rates Stable Following Jump in UK Budget Surplus
The Pound (GBP) is holding steady against the Canadian Dollar (CAD) this morning as markets react to the UK’s latest public borrowing figures.
According to data published by the Office for National Statistic (ONS), the UK registered a £2.8bn budget surplus last month, its largest July surplus in 18 years.
The jump has led to speculation that the stronger-than-expected figures should grant Chancellor Philip Hammond a little more wriggle room in the August Budget, potentially enabling him to support growth through increased spending.
Canadian Dollar (CAD) Exchange Rates Muted as Oil Prices Hold Steady
Limited movement in oil markets is currently restraining the Canadian Dollar.
With crude products accounting for around 15% of Canada’s total exports, the subdued activity has offered little direction for the ‘Loonie’ amid a lull in notable domestic data.
The muted movement in crude markets appears to be driven by uncertainty over whether OPEC quotas will be altered to reflect the fact than Iran’s crude exports face sanctions from the US.
GBP/CAD Exchange Rate Forecast: Brexit Uncertainty to Limit Sterling Gains this Week?
Looking ahead, the Pound Sterling Canadian Dollar (GBP/CAD) exchange rate may be put on the defensive again as market focus returns to Brexit.
With Brexit negotiations still appearing to be at an impasse, markets are becoming increasing concerned that the UK will be left to crash out of the EU without a deal next year, something which will likely apply considerable downward pressure to Sterling over the coming week.
Meanwhile, the Canadian Dollar (CAD) could face losses this week with the publication of Canada’s latest retail sales figures, with economists forecasting sales growth will have almost stalled in June after rocketing up 2% the previous month.