The pound has made small gains against the Canadian dollar over the last couple of weeks although it is hitting resistance at these higher levels. GBP CAD has now slipped back from 1.64 for this pair.
The recent rise in GBP CAD has been a result of both sterling strength and also Canadian dollar weakness. The pound has been performing better as some of those Brexit concerns have not been ignited despite Article 50 about to be delivered in these next few weeks. At the same time the Canadian dollar has been responding to a weakening in the price of oil. The Canadian dollar is impacted by fluctuations in the price of oil considering that Canada is a net exporter of oil. Any fall in the price of oil generally sees the Canadian dollar weaken which is exactly what has happened here.
The Bank of Canada meet tomorrow to discuss interest rate policy. No change is expected but the tone of the meeting could help shape the direction for the dollar going forward.
Thursday sees Canadian GDP figures which have the potential to be a big market mover. Anything positive here could see a jump higher for the Loonie.
UK data is light although the Purchasing Managers Index surveys will report on the UK manufacturing, construction and services sectors from Wednesday to Friday. These surveys provide for an excellent barometer as to the performance in these areas of the British economy.
Brexit is going to be the main driving force for the pound over these next few weeks so expect considerable volatility as Article 50 is finally invoked.
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