GBP CAD Weekly Forecast: Pound Canadian Dollar Exchange Rate Under Pressure Ahead of Canada Retail Sales

The Pound to Canadian Dollar exchange rate recovered some limited ground in the wake of an improved CBI distributive trades index.

Last Week: Bank of Canada’s Hawkish Commentary Boosts Canadian Dollar Exchange Rates

Demand for the Canadian Dollar picked up sharply on the back of the Bank of Canada’s (BOC) April policy meeting, which saw policymakers take a more hawkish outlook than anticipated.

With the central bank appearing willing to potentially raise interest rates in the coming months, having expressed confidence in the economic outlook, CAD exchange rates were given a solid boost.

A sharp uptick in UK retail sales growth was not enough to give the Pound any fresh support against its rivals, meanwhile.

Although signs continue to point towards the UK economy having recovered some of its lost momentum at the start of the second quarter the potential for Pound gains proved limited.

Three Things to Watch out for This Week

1. Canada Retail Sales

With forecasts pointing towards a solid monthly rebound in retail sales during February the mood towards the Canadian Dollar could improve further.

Evidence of strengthening consumer confidence and spending may offer fresh incentive for investors to pile into the higher-yielding Canadian Dollar.

2. Canada Average Weekly Earnings

CAD exchange rates could equally find support on the back of another strong average weekly earnings figure.

As long as wage growth continues apace confidence in the health of the Canadian labour market may improve, to the benefit of the Canadian Dollar.

3. Canada Gross Domestic Product

However, the GBP/CAD exchange rate may find a rallying point on Friday if the monthly Canadian gross domestic product reading slips as anticipated.

Signs of any slowing in economic momentum could leave the Canadian Dollar on the back foot against its rivals, in spite of wider signs of strength in recent data.

GBP/CAD Outlook

With fresh UK economic data thin on the ground for the remainder of the week the Pound to Canadian Dollar exchange rate could extend its losses on the back of improved Canadian data.

Louisa Heath

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