The Pound-to-Canadian Dollar rate retains an upside technical bias heading into a week that's set to bring the market's focus back onto the outlook for interest rates on each side of the exchange rate equation, with downside risks for both Sterling and Canada's Loonie.
The Pound-Canadian Dollar rate retains an upside bias, according to technical analysts, but fresh losses are forecast to blight the British unit before long as investors give it a wide berth again ahead of the next Brexit deadline.
The Pound-to-Canadian Dollar rate fell almost two percent last week amid moves that have placed a question mark over the six-month uptrend on the charts, and the exchange rate now needs the Loonie to weaken if Sterling is to retain its upside impetus.
The Canadian Dollar underperformed a number of major rivals Friday as financial markets overlooked a strong January jobs report amid a downward correction in so-called risk assets that's seen oil prices revert to the downside ahead of the weekend.
The Pound-to-Canadian Dollar rate bounced off the week's lows ahead of the January jobs report on Friday but earlier losses have left a key technical support level exposed, creating uncertainty about whether its six-month uptrend can endure beyond the weekend
The Pound was the best performing major currency last week and is tipped by technical analysts to advance on the Canadian Dollar over the coming days, although fundamental risks also favour more gains for Sterling over the coming days.
The Pound-Canadian Dollar rate rally endured Friday even after Canada's November GDP beat expectations, with the Loonie the unable to capitalise on any perceived goods news amid mounting concerns over the spread of coronavirus, which has seen oil prices walloped and wounded commodity-sensitive currencies.
The Canadian Dollar was weaker on Wednesday as investors the world over continued to mull the possible economic consequences of the rapidly a spreading coranavirus, although even after this performance the Loonie is unprepared for the potential impact the disease could have on the Bank of Canada (BoC) outlook.