Chance of GBP/CAD Advance if MPs Back Continued Customs Union Membership
MPs will be meeting to discuss whether the UK remains part of the EU customs union after Brexit; peers in the House of Lords voted in favour of membership last week.
If MPs also back continued membership of a customs agreement after the UK leaves the EU then the government may find itself in a difficult position.
The official line is that the UK will not be part of any customs agreement after leaving the EU, but it is unclear what will happen if MPs reject this notion.
As such, the Pound to Canadian Dollar (GBP/CAD) exchange rate could rally on the news as it may lead to a softening of the government’s stance on Brexit.
Canadian Dollar to Pound (CAD/GBP) Exchange Rate Forecast to Fluctuate on BOC Governor’s Speech
There could be Canadian Dollar to Pound (CAD/GBP) exchange rate volatility in the near-future, when Bank of Canada (BOC) Governor Stephen Poloz gives a speech.
Mr Poloz will be speaking this evening in Ottawa, Ontario, alongside Senior Deputy Governor Carolyn Wilkins.
The Canadian Dollar was recently devalued by Mr Poloz, when he asserted that interest rates would not be automatically hiked even if inflation exceeded the target range.
To that end, if Mr Poloz and Ms Wilkins discuss interest rate hikes in a positive manner then the Canadian Dollar to Pound exchange rate could rise.
The main things to watch out for will be any hints that rate hikes could come before the end of 2018, although explicit guidance on a month-by-month basis is highly unlikely.
Shrinking Canadian Budget could Trigger Late-Week CAD/GBP Exchange Rate Slide
Another upcoming Canadian economic event that has a chance to affect the CAD/GBP exchange rate will be the CA budget balance for February, revealed on 27th April.
The reading is predicted to show a decline from January’s surplus reading of CA$0.17bn to a deficit figure of CA$-0.87bn in February.
A shrinking budget doesn’t mean that the government won’t be able to spend on essentials, but instead may be forced to borrow more and increase national debt levels.
A forecast-matching deficit may not be too shocking for Canada’s budget office, which estimates a mere 5% chance of a budget surplus over the 2020-2021 period.
Regardless, the Canadian Dollar could be devalued by news of a budget deficit, which in turn might lead to a Pound to Canadian Dollar (GBP/CAD) exchange rate rise.