The Loonie (CAD) extends its gains against the Pound Sterling (GBP) due to increasing oil prices and mixed UK economic data. Hence, the GBP/CAD is tra
, higher wages suggest the central bank’s job isn’t done. The BoE’s expectations for another rate hike remained below last week’s estimates, which foresaw the bank rate to end at around 5.73%. Nevertheless, the latest data round suggests that Bailey and Co would refrain from exceeding the 5.50% threshold.
On the Canadian front, as the economy added more jobs than expected, as revealed last week, it has opened the door for additional tightening by the Bank of Canada . The BoC has expressed that people demanding higher wages would make it harder to curb stickier inflation.monetary decisions witnessed the BoC keeping rates unchanged at 5%. But the chances for additional tightening remain, as money market futures show 15 bps of further tightening for BoC’s June 2024 monetary policy decision.
In his latest remarks last Thursday, Tiff Macklem, the BoC’s Governor, stressed that interest rates may not be high enough to tame inflation. He added, “Going forward, we will look for further evidence that price pressures are easing.” Given the fundamental backdrop, the GBP/CAD could consolidate ahead of the upcoming monetary policy decisions in the near term. Nevertheless, higher oil prices could offset the interest rate differential in favor of the PoundGBP/CAD Price Analysis: Technical outlook
The daily chart depicts the pai as neutral to downward biased, despite the fact the GBP/CAD remains above the 200-day Moving Average . However, successive series of lower peaks and throughs suggest the cross would test the 1.6900 figure. A breach of the latter would expose the July 24 daily low of 1.6883, followed by the 200-DMA at 1.6729. Conversely, if buyers reclaim the 100-DMA at 1.6958, that could pave the way towards 1.7000.
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