GBP/CAD Exchange Rate Improves, Markets React Positively to Tory Manifesto
The Pound Canadian Dollar (GBP/CAD) exchange rate rose today, with the pairing currently trading around CA$1.716 after the Conservative’s continued lead in the opinion polls was unmoved after Sunday’s release of the Tory’s long-awaited manifesto.
Josh Hardie, deputy director-general at the Confederation of British Industry (CBI), commented:
‘Businesses will be heartened by [the Tory’s] pro-enterprise vision, while looking for even more ambition on areas such as access to skills, infrastructure and reaching net zero.’
The GBP/CAD exchange rate rose after investors heaved a sigh of relief, with the Tory’s previous manifesto being a disaster and compromising the party’s lead in the previous election.
In UK ecostats, today saw the publication of the CBI distributive trades survey for November, which showed a return to stability for the British retail sector and further boosted optimism in the economy ahead of the Christmas period.
Anna Leach, Deputy Chief Economist at the CBI, commented:
‘Retailers are entering the festive season with a bit of hope that sales will head up, with the strongest expectations in half a year. Actual sales have also stabilised and have nudged above average for the time of year and employment has stopped falling after three years of decline. But Brexit uncertainty continues to weigh on investment plans for the year ahead which remain weak.’
CAD/GBP Exchange Rate Sinks despite Improving Canadian Wholesales
The Canadian Dollar (CAD) failed to gain against the stronger Sterling in spite of today’s publication of Canada’s wholesale sales figure for September, which beat forecasts and rose from -1.2% to 1%.
Avery Shenfeld, Chief Economist at CIBC Capital Markets, said:
‘Wholesale trade provided a nice lift to September economic activity in Canada that otherwise had looked fairly tepid. Markets don’t typically react to this series, but might take note of the firmer real GDP print later this week that incorporates these data.’
CAD investors have remained cautious, however, with US-China trade relations remaining firmly in focus this week.
We could see the CAD/GBP exchange rate begin to edge higher later on this week if relations between the US and China improve. Any signs of an imminent ‘phase one’ trade deal between the two superpowers would provide a boost for the trade-reliant Canadian economy.
GBP/CAD Outlook: Could Improving US-China Relations Boost the ‘Loonie’?
Canadian Dollar (CAD) investors will be looking ahead to Thursday’s release of the Canadian current account figure for the third quarter, with any signs of improvement likely to improve market confidence in the ‘Loonie’.
US-China trade developments will continue to drive the Canadian Dollar, however, with any signs of improvement between the world’s two largest economies likely to provide some uplift for the CAD/GBP exchange rate.
UK political developments ahead of the 12th December general election will also remain in focus, with any indications that the Tories could lose some of their lead in the opinion polls likely to weaken the GBP/CAD exchange rate.