Looking ahead to this week, GBP CAD has remained lodged in the 1.6100-1.6200 region since Sunday night’s market re-open.
Foreign Currency Market Update – GBP / CAD Update
The Pound enjoyed another week of marked gains against the Canadian Dollar during last week’s session, confirming the pronounced upward trend for GBP CAD which has been in place since the middle of March. Sterling enjoyed a particularly strong day against the CAD on Friday, in spite of the release of Canadian inflation figures which beat analysts’ expectations. Ordinarily, higher than expected price rises in an economy would trigger talk of a central bank interest rate rise, which is supportive for a currency. However, last Friday’s session brought a far from ordinary set of circumstances for investors to grapple with. As the weekend close approached, global markets were awash with whispers that the German Chancellor Angela Merkel had telephoned Greek President Carolos Papoulias to suggest that his country hold a referendum on its continued membership of the eurozone. Although German officials quickly moved to deny the rumours, their mere existence was enough for market participants to scale back on their exposure to risk, hurting the commodity-driven Canadian Dollar. This more than negated the positive effect of the Canadian inflation numbers earlier in the day.
Looking ahead to this week, GBP CAD has remained lodged in the 1.6100-1.6200 region since Sunday night’s market re-open. Although last week’s session ended on a positive note for the pair, it wasn’t enough to push the rate past the previous week’s high of 1.6206. Another failure by GBP CAD to break this level during this week’s trading session would suggest that the pair’s forward move of recent times is running out of momentum. If the minutes of the most recent Bank of England MPC meeting, due for release on Wednesday morning, are of a negative tone, this could trigger such a move lower. Better than expected Durable Goods data on Thursday from Canada’s major trading partner, the US, would have a similar effect. Conversely, a break above 1.6206 would confirm the uptrend for GBP CAD, with 1.6400 providing the next proven level of resistance on the upside.
Summary of major upcoming data releases that we think may move the market.
- Pound to Canadian Dollar Forecast – The Pound had registered gains against the CAD in six of the seven sessions leading up to the release of last Friday afternoon’s Canadian employment figures
- Pound Sterling to Canadian Dollar Foreign Currency Exchange Rate Forecast – The Canadian dollar had a good week
- The Rand enjoyed another winning week against the Pound Sterling
- The Canadian Dollar shot up to its highest level against the Pound since Christmas week
- The Canadian Dollar came under selling pressure in the early part of the week