Despite the market seeing the Canadian Dollar run out of steam towards the end of 2019, it appears that it might be on track to reverse some of the damage done at the latter end of the year. Positive jobs data has helped the CAD find support and beat market expectations. Meanwhile, the GBP looks to this weak set of economic data releases, which could help or undo the GBP’s recent gains. November’s GDP, retail sales and inflation data are all set to be released this week and investors will be keen to observe the outcomes.
Positive Jobs Data for Canada Boosts Economy
The Canadian Dollar advanced over the Pound and USD on Friday but still closed the week falling short to both. As markets thought the CAD had run out of steam towards the end of 2019, the currency appears to be reluctant to give in. Last Friday’s jobs data supported the Loonie and showed that the economy had created 35.2k new jobs for December according to Statistics Canada. Markets expected a rise of only 24.9k, so the actual figure far surpassed that. Furthermore, the unemployment rate reduced from 5.9% down to 5.6% which saw a change in fortunes within the labour market in comparison November’s disappointing data here.
Despite the positive news, local economists in Canada have warned against excessive optimism as the jobs market was not the only sector revealed to be under pressure by recent figures. Governor of the Bank of Canada, Stephen Poloz, mentioned in a chat with the Ontario Securities Commission on Thursday that the labour market growth has slowed recently. This was a cause for concern as households were one of the main sources of Canada’s economic “resilience”.
GBP Awaits Upcoming Economic Data for Boost in Confidence as the Currency Looks to Hold Onto Recent Gains
For the GBP, this week will see the release of the November GDP data for the UK, alongside the retail sales and inflation data. The GDP figure is due later today and will give an insight into the growth and workings of the economy, which could help drive the economy going forward. The retail sales and inflation data will be important to the BoE, who recently suggested that an interest rate cut may still be an option for the UK, though markets are suggesting that the GBP isn’t priced for a cut any time soon. Investors will hope for positive outcomes from each data release and that the currency can rally on any positive news about the UK economy as the UK Prime Minister Boris Johnson continues his negotiations with the EU over Brexit.
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