GBP/CAD Exchange Rate Rises as Northern Ireland Backstop Options Increase
The Pound Canadian Dollar (GBP/CAD) exchange rate edged higher today and is currently trading around CA$1.7582.
The Canadian Dollar (CAD) was weakened last week, as political controversies wracked the Canadian Prime Minister Justin Trudeau following the former Attorney-General, Jody Wilson-Raybould going public on political corruption between the Government and a Canadian construction firm, SNC-Lavalin.
Wilson-Raybould complained, saying:
‘[There is] a consistent and sustained effort by many people within the government to seek to politically interfere in the exercise of prosecutorial discretion in my role as the Attorney General of Canada in an inappropriate effort.’
Sterling, meanwhile, benefited today from news that the Attorney General, Geoffrey Cox, had effectively shelved the time-limit on the Northern Irish backstop and has sought instead an ‘arbitration mechanism’ that would allow the UK or the EU to provide formal notice on the ending of the backstop.
This news has buoyed some optimism that Prime Minister Theresa May’s Brexit deal could pass through Parliament on 12 March, however some Eurosceptics remain unconvinced.
Meanwhile, Communities Secretary James Brokenshire urged patience, saying:
‘The Attorney General continues with his work to ensure we get legally-binding changes to ensure that we are not locked in the backstop.’
‘The negotiations are at a critical and sensitive point. People just need to have this little bit of patience to see how this now comes forward.’
Canadian Dollar Pound (CAD/GBP) Exchange Rate Falls over Huawei Controversy
Further strains have occurred between Canada and China, as the CFO of China’s tech giant Huawei, Meng Wanzhou – who was arrested last year by Canadian authorities for a breach of data laws – has pursued legal claims against Canada for breaching her civil rights.
Howard Mickleson, one of Meng’s lawyers, said:
‘[The lawsuit is] alleging serious breaches of her constitutional rights and seeking damages for misfeasance in public office and false imprisonment.’
The Canadian economy is particularly reliant on trade between China, and with increasing strains between the two nations, this is proving to weigh on market confidence in the ‘Loonie’.
GBP/CAD Outlook: Bank of Canada’s Interest Rate in Focus
Pound traders will be looking ahead to tomorrow which will see the publication of the UK BRC year‑on-year like‑for‑like retail sales figures for February, which are expected to decrease and potentially weakening Sterling.
These will be following by the publication of the UK Markit Services PMI figures for February, and with any slippage into contraction this could further weaken the GBP/CAD exchange rate.
Tomorrow will also see the Bank of England’s Governor, Mark Carney, deliver a speech, and with any bullish comments following on from the recent bout of Brexit optimism, this could cause the GBP/CAD exchange rate to rise.
Canadian Dollar investors’, meanwhile, will be looking ahead to Wednesday for the Bank of Canada’s interest rate decision, which is expected to hold steady at 1.75%.