The Pound to Canadian Dollar (GBP/CAD) exchange rate fluctuated last week, amid some volatility in oil prices and concerns over Brexit and coronavirus in the UK.
What’s Been Happening: GBP/CAD Firms following Volatile Week
The Canadian Dollar wavered through much of the week, as the oil-sensitive currency was driven primarily by peaks and troughs in oil prices, with WTI crude fluctuating by around $1 a day.
Through the second half of the week, CAD came under pressure as oil prices remained subdued and the US Dollar soared, with the ‘Loonie’ hitting an 11-day low against the Pound on Friday.
Meanwhile, Sterling also fluctuated through the week, with tensions over the Northern Ireland protocol and coronavirus concerns causing the Pound to dip sharply three times.
However, the Pound managed to bounce back from each dip. Despite the UK’s GDP figures for April printing 0.2% below expectations on Thursday, the Pound then firmed through the end of the week ahead of the G7 summit in Cornwall.
Three Things to Watch Out for This Week
- UK Inflation Rate
The UK’s CPI on Wednesday is forecast to show that the inflation rate continued to grow last month by 0.3%. This could boost Sterling by showing a strong economic recovery in the UK, particularly if the figures print above expectations.
- Canadian Inflation Rate
Canada’s inflation figures are also due out on Wednesday, with month-on-month inflation projected to increase by 0.5%. If Canada’s inflation rate meets market forecasts, this could offset any potential gains made in GBP/CAD off the back of the UK figures.
- Oil Prices
With oil prices expected to continue rising as more restrictions are lifted and global travel increases, the Canadian Dollar could make some gains through the rest of the week.
Looking ahead, the GBP/CAD pairing could trade in a wide range for the remainder of the week, as competing data releases and fluctuating oil prices might cause some volatility.