- GBP Looks to Reverse Poor Week Prior With GDP Figures, but Market Looks Unsupportive
- Canadian Dollar Looks to Continue Previous Weeks Run From an Upbeat Market Risk Sentiment
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The pound got off to a dreary start last week, held back by the market’s fear of a ‘no-deal’ Brexit. It was labelled the worst performing currency last week and saw the GBP/CAD exchange rate drop two percent as trading closed for the week. Pound sterling expects its GDP data this week in which forecasts are predicting little change to the figures for Q4. Meanwhile, the Canadian dollar saw a positive end to last week as the markets risk appetite picked up after a lull in new headlines surrounding the coronavirus and a breakthrough in the treatment of the disease from Chinese scientists.
After GBP’s performance last week landed it being named the worst performing currency of the week, it will be looking to reverse the damage as the new trading week opens up. Tuesday will see the release of its GDP figure for Q4. Running on the previous three quarter’s results, the market is not optimistic for a turnaround from the Sterling. The consensus looks for a 0.2% increase for the month to leave GDP unchanged for Q4. Should this be the case, it would provide a very weak rebound from the previous quarters contractions to cap off a terrible year. The report will be released at 09:30am GMT on Tuesday.
The Canadian dollar fared positively at the end of last week following a lift in market risk appetite. The sentiment had been subdued over the past couple of weeks since the coronavirus outbreak which saw the price of oil drop as well as investors fleeing risk-sensitive currencies for safer currencies like USD. As the new trading week begins, CAD investors will hope to see little of the coronavirus to continue the positive trend as fears decline about the disease. Canada’s positive jobs data for January went unnoticed as the virus prioritised. The report showed a creation of 34.5k new jobs, with a decline in unemployment from 5.6% to 5.5%. This was still positive news however, and would help bolster the defence against a BoC cut in the near future.
Looking forward, GBP will hope that any further Brexit negotiations will favour the currency as recent announcements from the UK government have only increased fears of no-deal Brexit. Meanwhile, for the Canadian dollar, the coronavirus will continue to be the currencies main focus as it looks to continue its elevation thanks to an increased market risk appetite.