GBP/CAD exchange rates have moved in the favour of the Canadian Dollar over the course of the week so far. Slightly lower than expected inflation figures being released for the U.K yesterday, lowering the chance of an interest rate hike being one of the reasons for Sterling weakness.
The other and possibly more worrying reason for the Pound stuttering once again is due to the political instability the U.K is facing at present. Prime Minister Theresa May is under severe pressure after seeing numerous resignations from her cabinet over the past week or so and although she has managed to survive key votes regarding Brexit, things are still looking extremely shaky for her and it looks like there are more problems to come.
Investors and speculators will be keeping a keen eye on any further political problems for the U.k, and should they occur then the Pound may struggle further.
On the other side we have a fair amount of Canadian economic data out in the next day or so. This afternoon we have Canadian employment data and then tomorrow we have Retail Sales along with key inflation data released at 13:30pm BST.
Following on from a rate hike and a fairly positive monetary policy statement last week, any further positive news for the Canadian economy may give the Canadian Dollar a further boost.
My personal opinion is that I would not be surprised to see GBP/CAD slip below 1.70 in the next week or so, unless we see a political miracle and some clear progress with Brexit, which may push the Pound back up again.
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