This morning saw the publication of Britain’s August job market report. The data showed even more job losses than expected, indicating coronavirus pandemic-inspired layoffs were even worse than feared. Optimism around oil prices and Canada’s economy are helping the Canadian Dollar to push GBP/CAD lower.
Last Week: Rising Risk-Sentiment Supports ‘Loonie’
Rising hopes for that the UK and EU would agree to a Brexit deal helped the Pound strengthen last week, but GBP/CAD was still pushed lower overall by the Canadian Dollar’s advance.
The Canadian Dollar saw a rise in demand throughout the week. The currency benefitted from speculation that US Congress could still pass fiscal stimulus after next month’s US Presidential Election.
These hopes helped prices of oil, Canada’s biggest export. This further boosted CAD.
On top of this, Canada’s economic data continues to impress investors, showing that Canada’s economy remains surprisingly resilient amid the coronavirus pandemic.
Three Things to Watch For This Week
- Brexit Developments
Thursday was originally the UK government’s self-imposed Brexit negotiation deadline. If there are any major Brexit developments around this date, the Pound is likely to see huge movement.
- Canadian Manufacturing Sales
The most notable Canadian dataset this week will be published on Friday. Strong Canadian manufacturing data could lead to further Canadian Dollar gains.
- US Political Developments
As November’s US Presidential Election draws closer, shifts in the polls are increasingly likely to influence risk and trade-correlated currencies like the Canadian Dollar.
It’s a quiet week for UK and Canadian data. This leaves the Pound to Canadian Dollar exchange rate reacting to developments in politics, such as Brexit and the US Presidential Election. The coronavirus pandemic will remain influential as well.