- Sterling suffers from Scottish Referendum talk
- A word of warning for CAD buyers and sellers
While GBP-CAD is trading at almost exactly the same level as it was a month ago, it has moved around throughout February and early March, topping out at 1.65 on the upside and bottoming out at 1.6220 on the downside.
All eyes on key Canadian data on Friday
Focus from Canada this week will be on Friday, when labour statistics for February are released at the same time as the Non-Farm Payrolls data is released in the US. Analysts currently expect Employment Change figures to fall by -2.5k and the Unemployment Rate to remain steady at 6.8%. This will be watched closely, after the Bank of Canada recently changed their sentiments to a more cautious tone, which came as a result of spurred speculation of a possible interest rate cut from Canada.
Concerns over future trade agreements with the US, which account for 74% of Canada’s exports, have been seen as the main stimulus for the Bank of Canada’s cautious stance. That said, domestic data hasn’t exactly helped matters, which is why such a close eye will be kept on the employment data due on Friday.
Sterling suffers from Scottish Referendum talk
Overall, recent UK data has been described as soft, and this, combined with the resurfacing of fresh Brexit risks from calls for a Scottish referendum, have been weighing on Sterling.
The market is currently of the opinion that the related uncertainty caused by Scotland is negative for Sterling, so more losses may be on the horizon as the narrative unfolds. There is talk that Scottish Nationalists may call for a referendum as the UK triggers Article 50.
A word of warning for CAD buyers and sellers
For those looking to transfer funds between GBP and CAD, we would suggest trading in the current range (1.65 buying and 1.6250 selling), as well as hedging your bets by putting something in place before the UK government triggers Article 50. Whether that’s a trade, limit order, or stop loss, it is important to cover downside risk, as while we don’t know what way the currency pairing will go, we would expect to see a major break out in either direction at some point later this month.
Article supplied by Halo Financial, March 2017
For further details – visit our Ask the Expert section
Download our Money Matters Guide