The CAD has found support against Sterling, after a difficult week for the UK economy.
Poor Manufacturing & Construction PMI data early this week set the trend, with the negative fallout from UK Prime Minster Theresa May’s speech putting further pressure on the Pound.
The CAD itself has been a mixed performer of late, dropping by almost ten cents from 1.60 to 1.70 against GBP in recent months.
This was due for the most part, due to a drop in crude oil prices (Canada’s main export) and an expectation that the Bank of England (BoE) may hike interest rates before the end of the year.
Rising oil prices have helped curb any further losses for the CAD and with the UK economy once again in the spotlight this week for all the wrong reasons, momentum is certainly with the CAD.
GBP/CAD rates have dropped below 1.65, with the CAD now likely to find plenty of support above the 1.60 threshold.
Whilst another rate hike by the Bank of Canada (BoC) looks unlikely before the end of 2017, this afternoon’s Unemployment news could have an impact on any further spikes for the CAD as we head into the weekend.
Their jobless rate is expected to hold firm at 6.2%, so any deviation from this figure is likely to cause additional volatility on GBP/CAD value.
Personally, I would be protecting any Sterling sell positions and avoid gambling on any major upturn in the UK economy. Market perception remains negative and with investors risk appetite low, I cannot see any major sustainable advances for Sterling under current market conditions.
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