The Pound to Canadian Dollar exchange rate rallied sharply last, briefly striking a six-week high amid renewed Brexit optimism.
Last Week: Pound Cheered by Restart of Brexit Trade Talks
The Pound stumbled through the first half of last week’s session, with Sterling sentiment being battered after Boris Johnson proclaimed that Brexit trade talks between the UK and EU were ‘over’.
But it seemed that Johnson may have jumped the gun a little, with the Pound mounting a convincing recovery in mid-week trade as the UK and EU agreed to restart talks after the EU’s Chief Negotiator Michel Barnier extended an olive branch to the PM.
However the GBP/CAD exchange rate failed to sustain its best levels as Sterling fell victim to some profit taking and concerns that there is still a lot of work to be done if a Brexit deal is to be found.
The Canadian Dollar, meanwhile, struggled to find its own momentum through last week’s session, as the ‘Loonie’ was undermined by stalling oil prices and some underwhelming domestic retail sales figures.
Three Things to Watch out for This Week
1. Coronavirus Developments
Likely acting as a key catalyst in the GBP/CAD exchange rate this week will be rising concerns over the global coronavirus resurgence, with the threat of a UK lockdown and falling oil prices infusing volatility into the pairing.
2. Brexit Headlines
Sterling sentiment this week is also likely to be driven by the ongoing uncertainty surrounding Brexit. Will reports of positive progress in trade talks help to buoy GBP exchange rates?
3. BoC Rate Decision
In focus for CAD investors this week will be the Bank of Canada’s (BoC) latest rate decision. While no policy changes are expected from the bank this month, some dovish forward guidance could weaken the Canadian Dollar.
Looking ahead, trade in the GBP/CAD exchange rate may be met by further volatility this week as coronavirus and Brexit uncertainty look set to continue to dominate sentiment.