GBP/CAD Exchange Rate Hit by Volatility amid Rising Brexit Uncertainty
The Pound Sterling Canadian Dollar (GBP/CAD) exchange rate appeared content to consolidate its gains at the start of last week’s session.
Sterling really started to pick up the pace in the mid-week however as reports from the EU appeared to support suggestions that a Brexit deal could be in place for the upcoming EU-UK summit.
However the Pound retreated in the second half of the week as Brexit optimism soured as it became clear that unresolved issues over the Irish border would prevent a deal from being finalised.
Pound Sterling (GBP) Exchange Rates Lifted by Impressive UK Wage Growth Figures
After struggling to hold its ground at the start of the week, the Pound (GBP) is pushing back against the Canadian Dollar and the majority of its other peers this morning, following the release of some stronger-than-expected UK labour figures.
Markets were particularly excited by the UK’s latest wage growth figures as according to data published by the Office for National Statistics (ONS) average earnings beat expectation and jumped to 3.1% in August, striking a nine-year high in the process.
The ONS did temper the report however as it reminded observers that strong inflation means that growth isn’t quite as strong as the headline figures would first suggest.
Commenting on today’s wages figures, our Head of Labour Market statistics David Freeman said: https://t.co/fPWL2F634J pic.twitter.com/7kwAb5iR7U
— Office for National Statistics (ONS) (@ONS) October 16, 2018
Despite this the results will be cheered by GBP investors who see the upswing in wages as a signal that the Bank of England (BoE) may be more willing to raise interest rates over the next twelve months.
Meanwhile the accompanying unemployment figures also proved supportive of Sterling this morning as they revealed the UK’s jobless rate stuck at a near record low of 4.0% over the same period.
GBP/CAD Exchange Rate Forecast: Will Brexit Hang-ups Overshadow UK Inflation Figures?
Looking ahead, the UK will publish its latest Consumer Price Index (CPI) on Wednesday, with the Pound Sterling Canadian Dollar (GBP/CAD) exchange rate potentially weakening if inflation slowed as expected last month.
However any reaction to the data may prove to be mostly limited as Brexit continues to cast a shadow over Sterling, with an EU summit taking place in the second half potentially resulting in more Brexit driven uncertainty in GBP exchange rates.
Meanwhile CAD investors will be mostly focused on the tail end of this week’s session as they await the release of Canada’s own CPI figures.
With analysts still split on whether the Bank of Canada (BoC) will raise interest rates when it meets next week, a robust inflation print could be seen as tipping things in favour of a hike, something which is likely to help bolster the Canadian Dollar.