GBP/CAD Exchange Rate Rangebound as Canadian Manufacturing Falls below Expectation
The Pound Canadian Dollar (GPB/CAD) exchange rate is up today and is currently trading around CA$1.7068 on the inter-bank market.
The Canadian Dollar (CAD) has steadied against Sterling following the publication of the Canadian manufacturing shipments figures for December, which fell below expectation by -1.3%.
This has deflated market confidence in the ‘Loonie’ as sales of petroleum and coal products have fallen, indicating a general slowing down of the Canadian economy.
On the data front, it has been remarkably quiet for Canada today; many CAD investors are directing their attention to the US-China trade discussions instead.
Meanwhile, some Canadian Dollar traders have remained optimistic about the US and China securing a trade deal, with President Donald Trump suggesting a possible extension of the trade ‘deadline’ by 60 days.
The Pound, however, floundered today after markets got an extra bout of Brexit jitters as Theresa May heads back to Parliament amidst the latest round of debates and votes on the contentious issue of the UK leaving the EU.
Further limiting Sterling’s appeal was the printing of the UK RICS housing price balance figures for January, which fell below expectation to -22% – its worse in 10 years.
David Knights, a Chartered Surveyor at David Brown & Co, commented:
‘There was the normal ‘bounce’ in the market expected in January with a good number of viewings and offers, but this did not last and coinciding with the reopening of the Brexit negotiations, we witnessed a slowing down in the last 10 days of the month.’
GBP/CAD Exchange Rate Steadies as Pound Traders Brace for Parliamentary Brexit Votes
Pound traders have been remaining cautious today as Prime Minister Theresa May faces heated questions in the House of Commons today, with various amendments to the Brexit deal due to be voted on later this evening.
The increasing rift at the heart of the Conservative government is exacerbating GBP investors’ concerns, however, as signs of intra-party conflict heighten the possibility of a Brexit no-deal.
Sir Keir Starmar, a Labour MP, criticised Theresa May’s strategy, saying:
‘The plan is to put essentially the same deal back to this House as a binary choice: my deal or no deal. Perhaps with some additional words…, but it will be essentially the same deal. That is not holding your nerve, that is plain reckless and we have to say no.’
Meanwhile, Jacob Rees-Mogg quelled some fears that the rebel faction within the Conservative Party, made up of the European Research Group, would vote against May’s deal, saying:
‘This is a secondary issue, rather than a primary one, and that is why I think it is highly unlikely people will be voting against this motion.’
CAD/GBP Forecast: Pound Could Rise if No-Deal is voted out of Brexit Agreement
GBP traders will be looking ahead to the publication of the UK retail sales figures for January tomorrow, and as they’re expected to increase this could provide some much-needed uplift for Sterling.
There is a general lack of Canadian economic data releases next week – and with Canadian banks closed on Monday for Canada’s Family Day – many CAD investors will be focusing on geopolitical developments.
The GBP/CAD exchange rate will likely be dictated by Brexit developments this week, and with any signs of a no-deal being taken from the table, this could see the Pound recover markedly against the ‘Loonie’.