The Pound to Canadian Dollar (GBP/CAD) exchange rate was met by some notable swings in movement last week in response to fresh Brexit uncertainty and some mixed data releases from both the UK and Canada.
Last Week: Pound Struggles amid Brexit Stalemate
Trade in the Pound was volatile last week in light of a bit of back and forth over Brexit.
This saw Sterling rise in the first half of the session on the back of some optimism from Downing Street, before being battered at the end of the week as the latest round of trade talks concluded with a warning from the EU’s Chief Negotiator that a deal ‘seems unlikely’ at this stage.
Also stoking some volatility were the UK’s latest inflation and PMI releases. While both printed above expectations, they weighed on Sterling amidst concerns the headline figures were not accurately representing the underlying weakness of the UK economy.
Meanwhile, some mixed Canadian data stoked some volatility in CAD exchange rates.
This saw the Canadian Dollar undermined by July’s weaker-than-expected inflation figures, but bolstered by a robust ADP employment report and record surge in domestic retail sales over the same period.
Three Things to Watch out for This Week
- Canadian GDP
In the spotlight this week is the publication of Canada’s latest GDP figures. While CAD investors are bracing for a record plunge in growth in the second quarter, will a larger-than-expected collapse weigh on the Canadian Dollar this week?
- BoC Macklem Speech
Also likely to influence the ‘Loonie’ this week will be remarks from Bank of Canada (BoC), Governor Tiff Macklem, as CAD investors look for any insight into the bank’s future policy plans.
- BoE Bailey Speech
GBP investors will look to a speech by Bank of England (BoE) Governor Andrew Bailey for fresh impetus this week, with the Pound potentially weakening should he allude to the possibility of negative interest rates.
Looking ahead, the GBP/CAD exchange rate is likely to infused additional volatility this week, in response to Canada’s latest GDP figures and some key central bank speeches.