GBP/CAD Exchange Rate Falls as the Canadian Dollar Benefits from Stabilising Oil Prices
The Pound Canadian Dollar (GBP/CAD) exchange rate eased slightly today, leaving the pairing trading around CAD$1.615.
The Canadian Dollar (CAD) has benefited from the easing of the stand-off between the US and China follow this week’s flare up of tensions between the two superpowers, following the White House’s assurance of its willingness to continue negotiations with Beijing.
White House Economic Adviser Larry Kudlow said:
‘[US President Donald Trump] is defending the American economy a lot of unfair trading practices. [He would] like to continue negotiations, he would like to make a deal, it has to be the right deal for the United States.’
As the Canadian economy is reliant on global trade and oil prices, this has provided some relief for ‘Loonie’ traders.
Today also saw oil prices steady as the US-China trade dispute shows signs of easing, with Brent crude up 0.05% after seven-month lows.
Michael McCarthy, a Chief Market Strategist at CMC Markets, commented:
‘It’s not a huge move…What we’re looking at is steady, reflecting concerns among traders whether or not the trade dispute development is fully priced in.’
CAD traders will be looking ahead to this afternoon’s release of the Canadian Ivey Purchasing Managers Index for June, and with any signs of improvement, we could see the CAD/GBP exchange rate edge higher.
GBP/CAD Exchange Rate Falls as House Prices Ease for Second Month in a Row
The Pound eased following today’s publication of the Halifax House Prices figures for July, which eased for their second month in a row from 5.7% to 4.4%.
Year-on-year figures also fell by -0.2%.
Russel Galley, the Managing Director of Halifax, said:
‘[I]t’s worth remembering that while economic uncertainty continues to weigh on the market, the overall trend actually remains one of comparative stability, with average prices down by less than £600 over the last three months.’
No-deal Brexit fears are however continuing to hold back the Pound’s gains today.
Concerns rose yesterday following comments from former Environment Secretary Michael Gove, who said that it was ‘wrong and sad’ that negotiations had broken down between the EU and the UK over Brexit.
Mr Gove said:
‘We will put all our energy into making sure that we can secure that good deal but at the moment it is the EU that seems to be saying they are not interested. They are simply saying: ‘No, we don’t want to talk.’… It is not in Europe’s interests.’
GBP/CAD Outlook: Sterling is Likely to Sink Further on Rising No-Deal Brexit Fears
Canadian Dollar traders will be looking ahead to tomorrow’s release of the Canadian New Housing Price Index figures for June, which are expected to improve slightly from -0.1% to 0%.
Sterling investors, meanwhile, will be awaiting tomorrow’s RICS Housing Price Balance figures for July, which are expected to hold steady at -1%.
The GBP/CAD exchange rate is likely to remain volatile this week as the EU and the UK are now both assuming a no-deal Brexit on October 31.