This week the Bank of Canada kept their interest rates on hold at 0.5% which was the expected outcome. Canada is currently experiencing lower growth than expected with the housing market slower than many predicted. The Canadian economy has particularly suffered in the first part of the year with the wildfires causing considerable disruption to oil production.
Oil is the biggest export for Canada and the crash in its price caused by the over supply did very little to help them especially when their production was low. Now that OPEC has some form of agreement and Saudi Arabia along with Russia have slowed oil production, the price of a barrel has increased.
This could present the CAD with an opportunity to strengthen, however with existing exports already slightly down an expensive Canadian Dollar could make matters worse.
Day of data releases for CAD
Tomorrow there will be a release of the Consumer Price Index and the Retail Sales. There is expected to be an improvement from the previous month for the CPI data which could be positive for the CAD allowing an increase in the value. Retail Sales are also expected to improve from the previous month with an increase from -0.1% to 0.3%.
The GBP/CAD rate is being heavily driven by the effect of the Brexit on Sterling as there is a global weakness for the pound. Furthermore, whilst there is strength in the cost of a barrel of oil the CAD could always be set to jump.