An increase in the UK unemployment rate failed to put the Pound to Canadian Dollar exchange rate under any significant pressure today.
Last Week: Sharp Decline in Employment Fuels Canadian Dollar Selling
A better-than-expected uptick in the Canadian inflation rate was not enough to shore up CAD exchange rates last week, even as inflation climbed to 1% on the year.
Instead the Canadian Dollar came under pressure thanks to an unexpectedly sharp decline in January’s ADP employment change figure, which saw a plunge of -231,200.
With the labour market displaying fresh signs of weakness at the start of the year the appeal of the Canadian Dollar naturally diminished, offering the GBP/CAD exchange rate a boost.
Even though UK retail sales saw a major decline in January this was not enough to drag the Pound lower against its rival ahead of the weekend.
Three Things to Watch out for This Week
1. Canada average weekly earnings
Worries over the health of the Canadian labour market may pick up further on Thursday with the release of December’s weekly earnings data.
Unless earnings show evidence of strengthening on the year the mood towards the Canadian Dollar looks set to sour further.
2. UK Nationwide housing prices
Any fresh signs of a slowdown within the UK housing market could weigh heavily on the GBP/CAD exchange rate on Friday.
As resilient demand for houses and solid prices have helped to shore up the economy in previous months a weak showing here could see the Pound trending lower across the board.
3. Canada budget balance
A narrowed budget deficit may offer the Canadian Dollar cause for confidence heading into the weekend, with forecasts pointing towards a moderate narrowing in December.
On the other hand, if the deficit instead widens this could leave CAD exchange rates biased to the downside, especially if the wider sense of market risk appetite weakens.
The Pound to Canadian Dollar exchange rate may come under fresh pressure in the days ahead if the Canadian wage growth data and budget balance prove positive in nature.