GBP/CAD rates have for the most part, remained fairly range-bound over the past month.
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As has been the case for the best part of 12 months, sterling has failed to make any impact above the interbank rate of 1.77, which has provided a huge amount of protection for the CAD.
In fact, it was late March 2018 when sterling’s value tumbled below this level and the pound has yet to recover, with yesterday losses pushing its value back towards the interbank rate of 1.75.
In what has been a turbulent year for both the UK & Canadian economies, the markets focus has been centred around Brexit and the impact this will have on the pound.
From a Canadian economic perspective, the impact of Brexit on the global markets along with escalating trade tensions between some of world’s largest economies, has been impacting investors risk appetite for the CAD.
This in turn has caused the CAD’s value to stagnate against the pound in recent months and despite the obvious concerns surrounding the UK’s position, it has failed to make any major inroads since the turn of the year.
Any potential upturn for the CAD has been hampered by a stagnation in oil prices over the past 12 months. Canada remains one of the world’s largest exporters of crude oil and as such, is reliant on global demand for its product. A fall in this demand, coupled with a softening in prices, has left an economic vacuum which has yet to be filled.
Looking ahead and with Brexit reports coming thick and fast this week, any breakthrough between the UK & EU could indeed boost global market confidence. This may in turn increase investors risk appetite for riskier based assets such as the CAD.
Those clients looking towards any key economic data releases will be monitoring todays employment change data for Canada, which is released this afternoon.
Tomorrow also brings with it the latest Retail Sales figures and key inflation data, which historically can have an impact on the CAD’s value.
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