Pound Canadian Dollar (GBP/CAD) Exchange Rate Rallies as Parliament Braces for ‘Humongous Showdown’
The Pound Sterling Canadian Dollar (GBP/CAD) exchange rate slumped and the pairing is currently trading around CA$1.7035.
On Thursday, the Pound jumped against the Canadian Dollar after Prime Minister Boris Johnson secured a ‘great new deal’ with the EU.
Earlier this morning saw Sterling slump Northern Ireland’s Democratic Unionist Party (DUP) stated it could not support the current Brexit deal in its current form.
In a joint statement from DUP leader Arlene Foster and deputy Nigel Dodds said that while discussions were ‘ongoing’, but ‘as things stand, we could not support what is being suggested on customs and consent issues and there is a lack of clarity on VAT’.
However, reports suggest that despite the UK and EU securing a deal, the position of the DUP has not changed.
Commenting on this, the BBC’s deputy political editor Norman Smith said parliament is ‘heading for one humongous showdown’ on Saturday.
Canadian Dollar (CAD) Slides as Oil Prices Slump 1%
Oil prices slumped by around 1% on Thursday, however this could do little to stop the oil-sensitive Canadian Dollar rising against the Pound earlier in the day.
However, a fresh wave of Brexit optimism offset earlier worries that the UK would be unable to reach a deal and buoyed Sterling.
Oil prices slumped after data revealed there was a larger-than-expected build-up of oil stocks in the United States.
However, losses were limited by comments from US Treasury Secretary Steven Mnuchin who said that US and Chinese negotiating teams were working on securing a text for the Phase 1 trade deal.
Munchin said both sides were working on getting a text for President Donald Trump and President Xi Jinping to sign next month.
However, he also added that the Trump administration has not made a decision on planned tariffs for December, and said:
‘We have not gone to the president with any recommendation or any decision – obviously what we were all focused on the October tariffs. We’ll address that as we continue to have conversations.’
Brexit Optimism Offsets Disappointing UK Retail Sales
The Pound rose against the Canadian Dollar as the President of the European Commission, Jean-Claude Juncker said the UK and EU reached a ‘fair and balanced agreement’.
The fresh wave of Brexit optimism offset earlier data that showed that retail sales growth softened despite an increase in real wage growth.
UK shoppers grew increasingly cautious about spending as the Brexit deadline approached, as monthly retail sales volumes were left flat.
While sales for the third quarter held steady at 0.6%, annual sales slipped from 3.6% to 3.1% making this the weakest growth since Q4 2018.
Pound Canadian Dollar Outlook: Will Brexit Pessimism Send GBP Lower?
Looking ahead to this afternoon, the Canadian Dollar (CAD) could extend its gains against the Pound (GBP) following the release of ADP’s employment change data.
If the number of jobs added to the Canadian economy jumps higher than expected it could buoy the ‘Loonie’.
Meanwhile, Sterling could suffer further losses if reports suggest the Prime Minister is unlikely to get the new Brexit deal through parliament.
If Boris Johnson fails to get approval for his deal in parliament, and is unable to get support from the DUP it is likely the Pound Canadian Dollar (GBP/CAD) exchange rate will slide.