GBP/CAD Exchange Rate Dips, Brexit Uncertainty Continues to Haunt UK Markets
The Pound Canadian Dollar (GBP/CAD) exchange rate eased today, with the pairing currently trading around CA$1.697 after Prime Minister Boris Johnson’s hopes of securing a majority were challenged on Sunday evening. The Labour Party declared that it would be seeking Tory Rebels and the DUP to force through amendments to drop the present deal.
Sir Keir Starmer, the shadow Brexit secretary, commented:
‘I say to any MP, but particularly the DUP, if you want to work with us to make this situation better, our door is open.’
As a result, the GBP/CAD exchange rate eased as Brexit uncertainty continues to haunt UK markets, and with reports of a possible meaningful vote on Boris Johnson’s deal today, Sterling traders are remaining cautious. However, with the withdrawal agreement being discussed on Saturday it is uncertain whether John Bercow, the House of Commons speaker, will allow the vote to go ahead.
In UK economic terms, today saw the release of October’s UK Rightmove house price index, which rose above forecasts from -0.2% to 0.6%. This left markets unmoved, however, as it represents its slowest growth since October 2008.
Miles Shipside, Director at Rightmove, commented:
‘With upwards pricing power now pretty flat, some sellers who are motivated by maximising their money seem to be holding back. They may be waiting for more certainty around both achieving their price aspirations, and also the Brexit outcome.’
CAD/GBP Exchange Rate Improves as Canadian Federal Election Kicks Off
The Canadian Dollar (CAD) edged higher against the Pound today as the Canadian Federal Election kicks off between the two top contenders Liberal Leader and current Prime Minister Justin Trudeau, and Conservative leader Andrew Scheer.
Nik Nanos of Nanos Research said:
‘If people were to describe the election, it would be ‘Indecision 2019’.’
Meanwhile, the trade-reliant Canadian economy has also benefited from an apparent truce between the US and China.
Orville Schell, Director at Arthur Ross, was downbeat about a trade deal emerging any time soon, however. Schell commented:
‘The Trump administration seems to be seeking to work with China on trade, but to oppose it on other questions where it sees inequities and a lack or reciprocity. There is little doubt that Beijing views such a posture as duplicitous, but in fact the logic of the current relationship is that we will have to agree on some issues, compete on others, and be adversaries on still others. This is our new bilateral state of grace.’
GBP/CAD Outlook: Brexit Developments to Remain in Focus
Canadian Dollar (CAD) traders will be looking ahead to tomorrow’s release of August’s Canadian retail sales figure. Any signs of improvement could further buoy optimism in the Canadian economy and benefit the ‘Loonie’.
Sterling investors, meanwhile, will be looking ahead to tomorrow’s release of September’s public sector net borrowing figure, which is expected to rise from £5.766 billion to £8.700 billion.
Brexit developments will remain firmly in the driving seat for the GBP/CAD exchange rate this week. Any indications of Boris Johnson’s deal gaining the necessary majority for a Parliamentary vote, however, could buoy optimism that the UK could leave the EU with a deal by October 31.