Economic Calendar: Pound and Loonie Trading Outlook

The Pound and Loonie will be front and center today ahead of the Consumer Price Index report from the UK that will shed further light on how inflation is fairing. How would both currencies trade today? Carefully examine this 18 April Economic Calendar: Pound and Loonie Trading Outlook from ADS Securities.

18 April, ADS Securities – Inflation in Britain is one of the key data investors and traders are following as it relates to how fast and aggressively the Bank of England will hike rates. We know that the BoE wants to raise their key interest rate levels during their next two meetings but the actual timing of the move is still under debate.

18 April Economic Calendar – Pound Trading Outlook

The Pound’s price action largely depends on when market participants believe the British central bank will pull the trigger and the pace of inflation is key in gauging when this will be. Unfortunately for the Pound bulls, today’s reading is expected to print softer which should dampen demand for Sterling in the short term. 

Yesterday the UK labor market report printed mixed but with wage growth not accelerating the British currency came off its highs to trade towards 1.43. A softer inflation reading today will increase the pressure to the downside and the next stop for the Pound/Dollar is around the 1.4250 floor.

Loonie Trading Outlook

At the same time, the Canadian Dollar will also attract traders’ attention today in light of the Bank of Canada’s Rate Decision. Investors know that the BoC will not change policy at this time but there’s a lot of interest around what Governor Poloz will say and what kind of guidance he will convey to the market.

We believe that the overall takeaway from today’s event will be positive and supportive of further gains for the Canadian Dollar. The domestic economy has been doing rather well in recent weeks with good progress along the key metrics of the economy: job market activity has accelerated, the housing market conditions have improved and inflation is ticking higher.

The USD/CAD has remained below 1.26 for the past week and further demand for the loonie today – following a bullish BoC tone – will send the currency pair lower with the 1.2450 level being the next area of focus.

Asia Equities

Equity markets in Asia are trading higher this morning and the European and US futures are also pointing towards a positive opening bell.

The easing of geopolitical tensions over the past week has helped global equities remain on a positive trajectory which we expect to continue barring any surprises. Gold remains capped below the $1,350 mark and with little in terms of risk-off demand, the yellow metal should stay range-bound in the short term.

ADS Securities Risk Disclaimer

This article was provided by analysts of ADS Securities.

Trading foreign exchange, foreign exchange options, foreign exchange forwards, contracts for difference, bullion and other over-the-counter products carries a high level of risk. All opinions, news, analysis, prices or other information contained in this communication are provided as general market commentary. It does not constitute investment advice. Nor a solicitation or recommendation for you to buy or sell any over-the-counter product or another financial instrument.

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