Pound Canadian Dollar (GBP/CAD) Exchange Rate Muted Ahead of Supreme Court Decision
The Pound Sterling Canadian Dollar (GBP/CAD) exchange rate was left muted and the pairing is currently trading at around CA$1.6541.
Sterling remained steady against the Canadian Dollar on Monday as investors awaited the UK Supreme Court’s decision.
If the Court were to go against the government, Jeremy Stretch, Head of G10 forex strategy at CIBC noted this would increase political uncertainty and ‘weigh on Sterling a little’.
Meanwhile, expectations of progress in Brexit negotiations are low.
This leaves little room for disappointment if Prime Minister Boris Johnson fails to gain ground with European leaders this week.
In a note to clients, MUFG analysts wrote:
‘We are sceptical of much in the way of progress being made on top of that there is also the risk of PM Johnson having to cut his trip short and return to London if the Supreme Court decision goes against the government.’
Sterling (GBP) Flat as Brexit ‘New York Breakthrough’ Unlikely
Meanwhile, Boris Johnson said it was unlikely he would become significantly closer to reaching a revised Brexit deal during the United Nations General Assembly.
Johnson noted that ‘a New York breakthrough’ was unlikely during a series of planned talks with European leaders this week.
Speaking to reporters, the Prime Minister said:
‘I would caution you all not to think this is going to be the moment.
‘I don’t wish to elevate excessively the belief that there will be a New York breakthrough. I’m not getting pessimistic – we will be pushing ahead, but there is still work to be done.’
Added to this, Sterling was left under pressure as Friday saw the Irish Foreign Minister revealed that the UK and EU were still far from a deal.
The Financial Times reported that Johnson told colleagues he did not expect a full deal would be reached that covers the Irish border.
Last Week: Canadian Retail Sales Disappoint
Retail sales failed to impress at the end of last week, leaving the Canadian Dollar under pressure.
Statistics Canada revealed sales edged up by a lower-than-expected 0.4% in July.
Data showed sales volumes saw no growth which dampened sentiment in the ‘Loonie’.
Commenting on the data, Director at Klarity FX, Amo Sahota noted:
‘I didn’t think the reading was that compelling for Canada. It maybe just nudged a little more weakness in the Bank of Canada outlook but not enough to move interest rate probabilities.’
Pound Canadian Dollar Outlook: Will GBP Rise as Parliament Returns from Suspension?
This afternoon, the Canadian Dollar (CAD) could edge up against the Pound (GBP) following the release of July’s Canadian wholesale sales.
If sales rise higher than expected, it could provide an upswing of support for the ‘Loonie’.
Looking ahead, the decision from the UK Supreme court on whether Boris Johnson’s decision to prorogue parliament could cause movement in the pairing.
If the court rules the move unlawful and parliament returns from its five-week suspension early, the Pound Canadian Dollar (GBP/CAD) exchange rate is likely to edge lower on increased political uncertainty.