Last week the Loonie lost value against the Pound as Sterling had a strong week after the number of Brexit related headlines was quieter than in recent weeks.
Moreover, there was mixed news regarding oil which usually impacts the Loonie’s value, and with the commodity losing value towards the end of the week is not a surprise to see a reduction in CAD’s value in line with the fall in the oil price.
Although Sterling lost value against many major currencies yesterday, after reports that May will shortly announce an imminent cut-off date after which EU citizens who move the UK will be eligible to remain permanently, the Pound actually gained against CAD which could be sign of things to come this week.
I’m expecting to see CAD lose value if Trump and Yellen are bullish regarding the US economy during their speeches this week. My reasoning behind this is that bullish attitudes from them will increase the likelihood of another rate hike from the Fed in the short term, which will limit demand for the Canadian Dollar.
Due to the economic calendar being almost empty in the UK this week, investors will need to turn their attention to Canada for the likely market movers for GBP/CAD.
Last Friday Canadian Inflation figures came out better than expected for the month and year increasing the chance of the Bank of Canada raising interest rates in the short-term future.
The BoC’s next opportunity to raise rates will be this Wednesday at 3pm. Although no changes are expected there could be a surprise so it’s worth keeping an eye on, and there will also be a statement afterwards whereby any indications from the BoC regarding future monetary policy could impact the GBP/CAD rates.
On Thursday there will also be GDP Figures out of Canada at 1.30pm UK time. There are contractions expected both month on month and annually, so expect movement between GBP/CAD if the figures spring a surprise.
If you’re based in Canada and conscious of the time difference, please be aware that you’re not restricted by it. We offer trade options that allow clients to book deals automatically at their target prices, so do get in touch on 01494 725 353 if you wish to discuss these aspects of our service in further detail.
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