Pound Canadian Dollar (GBP/CAD) Exchange Rate Muted ahead of US-China Trade Talks
The Pound Sterling Canadian Dollar (GBP/CAD) exchange rate remained flat and the pairing is currently trading at an inter-bank rate of CA$1.7516.
Risk sentiment continues to remain fragile ahead of today’s face-to-face trade talks between the US and China.
The Chinese Commerce Ministry confirmed this morning that Vice-Premier Liu He and his delegation were travelling to Washington to continue discussions.
However, yesterday US President Donald Trump heightened tensions.
At a campaign rally in Florida he stated:
‘They broke the deal […] They can’t do that. So they’ll be paying.’
Meanwhile, in response to the threats of further tariffs on Chinese goods, Beijing has said it will take ‘necessary countermeasures’ if tariffs are raised on Friday.
This likely weighed on the risk-sensitive ‘Loonie’.
Sterling (GBP) Flat as Cross-Party Talks Close to Collapse
On Thursday reports emerged suggesting that cross-party Brexit discussions were close to collapse.
This fresh wave of Brexit pessimism likely dampened sentiment in Sterling.
Meanwhile, the mounting pressure on UK Prime Minister, Theresa May to name a departure date also did little to help the Pound.
Commenting on this, Analyst at ACLS Global, Marshall Gittler said:
‘Since most her [May’s] likely replacements are even more hard-core ‘Leave’ supporters than she is, this raises the possibility of a hard Brexit, i.e. crashing out with no agreement at all.’
Canadian Dollar (CAD) Muted as Canadian Housing Starts Jump 23%
On Wednesday, data revealed that Canadian housing starts jumped by a higher-than-forecast 23% in April.
The Canadian Mortgage and Housing Corporation (CMHC) said annual housing starts rose to 235,460 from 191,981 units in March.
Commenting on the data, National Bank Financial’s analysis team noted:
‘Starts trended to their highest level in over 10 months. This was another welcome development after groundbreakings in February dropped to an almost 3 year low. The improvement in April was due to both multi and single-detached urban starts. Multiple urban starts were the largest contribution to the monthly increase and reached their highest level ever recorded.’
However, despite the jump in starts, the Canadian Dollar remained muted against Sterling.
Pound Canadian Dollar Outlook: Will the GBP/CAD Exchange Rate Slide on Stagnating UK GDP?
On Thursday afternoon, the Canadian Dollar (CAD) could rise against the Pound (GBP) following the release of the Canadian New House Price Index.
If March’s data reveals that the selling prices of houses in Canada has jumped higher than forecast, the ‘Loonie’ could receive an upswing in support.
Looking further ahead to Friday, Sterling could slide against the Canadian Dollar following the release of the UK Q1 GDP.
If preliminary GDP stagnates during the first quarter of 2019 or slides further than forecast, the Pound Canadian Dollar (GBP/CAD) exchange rate could slide.