The Pound to Canadian Dollar (GBP/CAD) exchange rate has been trending with a downside bias so far this week. Sterling is edging higher ahead of today’s anticipated UK-EU Brexit talks, but appeal is limited. Meanwhile, strong Canadian housing prices and rising oil prices are helping to buoy the Canadian Dollar.
Last Week: Oil Prices and Data Buoy Canadian Dollar
The Pound has seen many recovery attempts in recent weeks. However, as Britain’s coronavirus and Brexit outlooks remain gloomy, these attempts have been generally brief.
Sterling’s continued weakness made it easier for the Canadian Dollar to advance last week. The oil-correlated Canadian Dollar was able to rebound more strongly from its recent lows as oil prices spent much of the week advancing.
On top of this, Canadian manufacturing data published at the end of last week was notably stronger than expected. This helped CAD to sustain gains.
Three Things to Watch For This Week
- Inflation Rate Data
UK and Canadian inflation rate stats will be published on Wednesday. While these are unlikely to be hugely influential, some surprising stats could still impact domestic price pressure outlooks.
2. Retail Sales Results
Friday will see the publication of UK and Canadian retail sales stats from July. These are likely to be the most influential figures of the week and will give markets a better idea of how consumer activity is holding up amid the coronavirus pandemic.
3. UK PMI Projections
Markit’s August UK PMI projections will be published on Friday. They will give markets the clearest idea yet of how Britain’s economy is faring while coronavirus lockdowns start to ease.
UK-EU Brexit negotiations are set to take place throughout the week which could cause big Pound movement if there are any big developments. However, even if talks remain at a standstill there are plenty of UK and Canadian stats for investors to keep an eye on.