Canadian loonie wins again, bagging a second straight week of gains despite flat GDP. US inflation cools, potentially paving the way for Fed cuts, boosting the loonie further. UK pound takes a breather on holiday with mixed economic signals. BoE likely sticking to “higher for longer” rates despite recession risk.


Canadian Charm:

  • Loonie shines for two weeks in a row, climbing 0.83% this week and 2.2% in November and December.
  • Flat GDP a downer, but retail sales surge offers hope.
  • US inflation data eases, fueling speculation of rate cuts and pushing the loonie higher.


British Pound Pause:

  • Pound treads water as UK banks take a holiday.
  • Mixed economic picture: strong retail sales clash with weak GDP and revised downwards growth.
  • Recession looms as Q2 GDP revised lower, adding pressure to the pound.
  • BoE on hold for now, but weaker data might bring rate cuts in early 2024.


Technical Bits:

  • USD/CAD: Tested support at 1.3262, resistance at 1.3262 and 1.3289.
  • GBP/USD: Touched resistance at 1.2703, next up is 1.2732. Support at 1.2670 and 1.2641.


Key Takeaways:

  • Canadian dollar on a roll, fueled by US inflation easing and potential Fed cuts.
  • British pound in limbo as mixed data and BoE’s hawkish stance clash.
  • Both currencies face technical hurdles and uncertainties in the new year.
Categories: Market News

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