Pound-to-Canadian-Dollar Rate Dives Again as Brexit Woes Mount, Retail Sales Boost CA Economy

Pound Sterling succumbed further to the overtures of a resurgent Loonie Thursday after March retail sales figures cheered the Canadian economy and as a Brexit-related crisis continued to brew in Westminster, threatening new lows for the Pound-to-Canadian-Dollar rate.

The Pound is locked in a steady downtrend against the Canadian Dollar but markets will be watching a key support level to put an end to the run lower temporarily.

The Pound-to-Canadian-Dollar rate plumbed fresh lows Friday and the Loonie bucked a global trend by besting the U.S. greenback after the White House lifted tariffs on imports of Canadian steel and aluminium, amid a return of 'no deal' Brexit risk.

The Canadian Dollar gained a shot in the arm on Thursday after positive trade news helped offset marginally disappointing inflation data, giving the currency a boost which helped it to extend its rally against the weaker Pound.

The Canadian Dollar was on the defensive Wednesday after official data showed domestic inflation pressures weakening and as fears for the global growth outlook mounted further, but Morgan Stanley says there are brighter days ahead for the currency.

The Pound is seen entering a short-term downtrend against the Canadian Dollar but we caution that the broader context for GBP/CAD remains one of choppy price action, so be aware.

The Canadian Dollar shot higher and recovered earlier losses from many rivals Friday after official data showed the economy creating new jobs at a rapid clip in April, almost making a mockery of a consensus that had looked for only meagre growth. 

The Canadian Dollar could become a target for short-sellers over the coming days if markets are right in fearing an imminent escalation of the so-called trade war between the world's two largest economies, some analysts say.