The GBP CAD exchange rate has seen relatively flat performance so far this week and the outlook remains low due to a lack of Pound appeal. However, some of this week’s upcoming data could alter the trajectory or GBP CAD trade.
GBP CAD currently trends just above the week’s opening levels of 1.6490, in the region of 1.6510.
Pound (GBP) Could be Weak until Thursday
There hasn’t been much reason for investors to buy the Pound this week so far, as investors await the notable UK data due for publication on Thursday.
Sterling has seen poor performance since last week, when the Bank of England (BoE) took a more dovish than expected stance which lowered the Pound outlook.
The BoE cut its UK growth forecasts for 2017 and 2018 and BoE Governor Mark Carney issued fresh warnings on the long-term effects the Brexit process could have on Britain’s economy.
As a result, investors are doubtful the bank will take any hawkish stance on monetary policy any time soon. Analysts are now more concerned that the Pound outlook will remain weak in the long-term.
Later in the week, Britain’s June trade deficit update will be published alongside manufacturing production, industrial production and construction output data from June.
This will be the week’s most influential UK data and is the biggest potential for the Pound outlook to improve slightly.
If June’s UK data beats expectations, it will boost hopes that Britain’s economy has been more resilient than expected, which would help boost GBP CAD at the end of the week.
However, Brexit news remains in focus too. If fresh Brexit developments disappoint traders this could keep pressure on the Pound even if UK data impresses.
Canadian Dollar (CAD) Traders Await Housing Data and Oil News
As with the Pound, investors have lacked a reason to buy into the Canadian Dollar since the weekend.
Last week’s Canadian employment data was mixed and was unable to give the ‘Loonie’ any fresh boosts.
The Canadian Dollar outlook hasn’t actually changed much since the Bank of Canada (BOC) hiked Canadian interest rates in July.
Investors are looking to commodity news and to upcoming Canadian stats before making any fresh moves on the currency this week.
Prices of oil, Canada’s most lucrative commodity, have trended above US$49 per barrel this week amid market hopes that major oil producers from OPEC will improve oil production cut compliance.
OPEC is holding a meeting this week and if it ends with plans to strengthen and solidify oil production cut plans this could give oil markets a boost and support the oil-correlated Canadian Dollar too.
Oil prices have already seen some support this week as Saudi Arabia will reportedly be cutting oil sales to key markets in Asia as part of efforts to tackle the commodity’s supply glut.
Before the end of the week, Canada’s July housing starts and June new housing price reports will be published.
These, in combination with any developments from the OPEC meeting, have the best chance of influencing Canadian Dollar exchange rates this week.
GBP CAD Interbank Rate
At the time of writing this article, the GBP CAD exchange rate trended in the region of 1.6511. The Canadian Dollar to Pound exchange rate traded at around 0.6050.
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