Last week did not prove substantial for either currency or their GBPCAD Interbank exchange rate. The UK narrowly escaped sliding into recession in the third quarter. At the same time Canada was at the mercy of president Trump as he failed to release any further information in his Wednesday speech which caused worry over the deal pushing forward.
GBP Hopes Political Optimism Can Pull It out of Uncertainty
The pound has been impacted in every way since the start of the Brexit endeavour. GBP has recently been boosted as hopes have lifted that the Conservatives may be in a good place to retain power. This is following feedback from surveys and reports ahead of the December general election. If the Tories do hold power then the likelihood of the UK leaving the EU by the end of January 2020 is more of a reality.
CAD Looks to Us-China Talks to Receive Upswing of Support
Looking forward to Tuesday, the CAD may edge down against the pound. This is due to the Bank of Canada’s (BoC) Senior Deputy Governor, Carolyn Wilkin’s speech that is looming. Should she highlight monetary policies with any signs of easing it is likely that the Canadian dollar will be left under pressure.
But investors remain optimistic as Wednesday looks to reveal the BoC’s Consumer Price Index. A rebound may be observed should October’s inflation data improve upon September’s performance. This could cause the CAD to edge higher. The White House economic advisor, Larry Kudlow highlighted that a trade deal was ‘getting close’, this inspired optimism and was largely due to constructive discussions with Beijing.
GBP/CAD Interbank Rate Could Slide Towards the End of the Week
Despite the optimism for both currencies this upcoming week, there are of course risks that may play out as the week unfolds. September’s Canadian Retail sales are set to be announced towards the latter end of the week. The pairing could slide and should the sales rebound and raise higher than expected the GBPCAD Interbank exchange rate could be set to slump. Reports also suggest that the GBP could slide after the Bank of England’s (BoE) inflation report hearings. Should the bank hint towards rate cuts rather than increases, the GBPCAD is likely to slide further.
Investors from both sides will be looking towards the coming week and will be eager to observe the figures from both the BoE’s report alongside the BoC’s Consumer Price Index.
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