The Canadian dollar has seen a steady slide against the pound so far this month due to an ailing Canadian economy and the fall has been accelerated this week owing to the likelihood of a delay of the March 29th Brexit deadline.
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Investor sentiment seems to be of the opinion that Theresa May’s next steps in her Brexit plan make the chance of a no deal scenario less likely, which the markets view as positive news for the Pound and as such we have witnessed some of the best levels to buy CAD since July 2018.
This news has intensified negative sentiment regarding the CAD following Governor of the Bank of Canada, Stephen Poloz’s statement at the end of last week which signalled a dovish approach to future monetary policy moves.
Similarly to the US, there were expected to be further rate hikes in Canada in 2019, but Poloz recently stated that the BoC were in no rush to raise rates and there is a lot of uncertainty on what their monetary policy path will look like in the future.
Later on today at 13.30 will give a good indication of what the bank’s next monetary policy move will be at the beginning of March, with inflation data for January being released. The expectation is that these figures will show a sharp decline which would bolster the bank’s current stance on maintaining rates at their current level.
There are also GDP numbers released on Friday afternoon for Q4 of 2018 which also look set to show a decline so there could be some excellent opportunities to take advantage of for Loonie buyers.
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