GBP & CAD Fall on Poor Data, Interest Rate Outlook

The Great Britain pound fell during the past trading week on poor macroeconomic data and concerns that the Bank of England will postpone the planned interest rate hike. The Canadian dollar had the similar issues.

Weak inflation and disappointing retail sales led to concerns that the BoE will be reluctant to proceed with monetary policy normalization. Indeed, BoE Governor Mark Carney acknowledged that macroeconomic data was mixed recently. He signaled that a hike in May is not a foregone conclusion and may happen at a later date.

The Bank of Canada also disappointed traders after it kept interest rates unchanged and issues a policy statement that turned out to be more dovish than was expected. Adding to the negative factors to the Canadian currency, the inflation print missed expectations.

GBP/USD fell from 1.4241 to 1.3995 after touching the weekly high of 1.4376 — the highest level since June 19. USD/CAD advanced from 1.2596 to 1.2757. GBP/CAD slid from 1.7942 to 1.7850.

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