Pound Canadian Dollar (GBP/CAD) Exchange Rate Falls as PM Rules out Third ‘Meaningful Vote’
The Pound Canadian Dollar (GBP/CAD) Exchange Rate slipped this afternoon and the pairing is currently trading at an inter-bank rate of CA$1.7681.
Prime Minister Theresa May has ruled out having a third ‘meaningful vote’ this week due to a lack of support from MPs.
The Prime Minister said MPs have expressed opposition to a no-deal but the alternative ‘is to pursue a different form of Brexit or a second referendum.’
‘The bottom line remains that if the House does not approve a withdrawal deal and cannot countenance leaving without a deal we will have to seek a longer extension.
‘We will have to take part in European elections.’
The European Commission also put further pressure on Sterling today, as they warned the UK is ‘increasingly likely’ to leave the European Union without a deal.
In a statement released Monday, the EC said ‘preparedness and contingency work’ they had been conducting since December 2017 was now complete.
Canadian Dollar (CAD) Rises despite Fears of Potential US Recession
The Canadian Dollar (CAD) was likely muted earlier this afternoon as fears of a potential US recession increased over the last few days.
While fears of a global economic slowdown likely weighed on the ‘Loonie’, the Canadian currency was able to make gains on Sterling (GBP) following a fresh wave of Brexit pessimism.
Another part of the US yield curve inverted, and when this occurred in the past a recession has always followed.
Commenting on this, Martin Farrer of the Guardian said:
‘US 10-year treasury yields slipped below the three-month rate for the first time since 2007 as nervous investors ploughed their money into the safe haven of bonds rather than riskier assets such as shares.
‘This so-called inversion of the bond yield curve – where long-term rates fall below short-term – has predicted every recession for the past 60 years.’
Sterling (GBP) Slides as Government ‘Chickened Out’ of Delivering Brexit
Monday morning saw the Pound (GBP) weighed down by Brexit pessimism as there were calls for Prime Minister Theresa May’s resignation.
The Prime Minister spent Sunday holding crisis meetings with fellow Conservative MPs as she made further efforts to gain support for her Brexit withdrawal agreement.
However, it remains unclear whether or not these meetings were successful as it was only revealed that MPs had discussed ‘whether there was sufficient support’ to bring May’s deal forward for a third vote.
MP Boris Johnson who attended these meetings said the government had ‘chickened out’ of delivering Brexit.
Johnson added that May would need to set out ‘convincing proofs’ to show her next phase of negotiations would be different.
Pound Canadian Dollar Outlook: Will the GBP/CAD Exchange Rate Slide on Fears of a No-Deal Brexit?
As there is a lack of economic data coming from the UK at the start of this week’s session, it is likely that Brexit will remain the main catalyst for movement in the pairing.
While Theresa May has ruled out a third ‘meaningful vote’ due to a lack of support, it is likely further that further signs pointing towards the UK crashing out of the EU without a deal will weigh on Sterling (GBP).
It is also likely that further data indicating that the US is experiencing a slowdown and could potentially be headed towards a recession could see the Canadian Dollar (CAD) slide.
If there are further signs of a global economic slowdown, it could cause the Pound Canadian Dollar (GBP/CAD) exchange rate to rise.