GBPCAD rates have been improving on the back of sterling rising against its counterparts. This has been helped interestingly by polls in France showing Marine Le Pen is looking strong in her campaign to become President. The pound is often used as a safe haven against the weakness in the Eurozone and the pound is enjoying some improvements against the Canadian dollar this afternoon on the back of this. The big question is will this continue and what can we expect to happen on GBPCAD for the rest of this week?
Well tomorrow is a busy day with the release of the latest UK GDP (Gross Domestic Product) figures which are likely to confirm the UK economy growing at a healthy pace. Many commentators are keenly watching the state of the UK economy for any signs that the Brexit vote has negatively impacted the UK. So far this has not been felt too strongly with UK Unemployment at record lows and the UK economy growing healthily. I suspect sterling could rise further on the back of this news and then in the afternoon we have Canadian Retail Sales figures which will be very interesting. A move higher cannot be ruled out but I do expect sterling to remain susceptible to shocks. I would suggest a high of 1.65 if this data sets play out as planned.
Thursday is perhaps bigger news with the latest Federal Reserve Meeting Minutes where we will get some direction on the interest rate policy for the US which has bearing on the Canadian dollar exchange rate as the US dollar has great bearing on the Canadian dollar. This could lead to some improvements for the CAD against the pound as it is widely expected that the US will be looking to raise interest rates in the coming weeks or months. A stronger US dollar generally means a stronger CAD although there is always the prospect of Donald Trump saying or doing something to upset the markets and potentially weaken both currencies!
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