The Pound Canadian Dollar (GBP/CAD) exchange rate fluctuated throughout last week’s session as the return of the ‘Partygate’ scandal dominated UK headlines.
What’s Been Happening: Pound Canadian Dollar Mixed as Boris Johnson’s Future in Doubt
The Pound Canadian Dollar exchange rate stumbled at the beginning of last week’s session. Sterling seesawed in accordance with fluctuating market sentiment, while the ‘Loonie’ fell in tandem with oil prices.
Midweek, the return of the ‘Partygate’ scandal dominated UK headlines: Boris Johnson was accused of misleading parliament and faced calls to resign.
The resulting political uncertainty weighed on GBP exchange rates.
Meanwhile, Canada’s consumer price index for March exceeded expectations and reporting inflation surged to 6.7%.
This helped to bolster expectations for the the Bank of Canada’s (BoC) next interest rate decision, boosting CAD exchange rates in the process.
At the end of the week, the ‘Loonie’ firmed against some of its weaker peers in response to better-than-expected retail sales in February.
On the other hand, the Pound struggled as UK retail sales declined by 1.4% in March. Alongside weaker-than-expected service and manufacturing PMIs, this raised doubts over the Bank of England’s (BoE) next interest rate decision.
Three Things to Watch Out for This Week
- Central Bank Speeches
Speeches from BoE Governor Andrew Bailey and BoC Governor Tiff Macklem may influence the GBP/CAD exchange rate this week. Markets will be hoping for more clarity regarding their respective banks’ future monetary policy.
- Canadian GDP
Canada’s latest GDP figures are expected to report domestic growth accelerated from0.2% to 0.8% in March. If this prints true, it is likely to bolster the ‘Loonie’.
- Russia-Ukraine War
Russia’s invasion of Ukraine is likely to continue to influence market sentiment. Should the war rage on without a clear end in sight, it is likely to pressure GBP/CAD.
Pound Canadian Dollar Forecast
Looking ahead, the Pound Canadian Dollar exchange rate could struggle this week amid ongoing Ukraine concerns and mixed market sentiment.