Pound to Canadian Dollar Rate Dips as Brexit Moves on to ‘Phase Two’
The Pound to Canadian Dollar (GBP/CAD) exchange rate is trading in a tight range ahead of the release of this week’s high-profile Canadian data, including inflation and growth stats.
After fluctuating wildly in response to Brexit developments last week, the GBP/CAD exchange rate has been left trending around the day’s opening levels as economists consider the next stage of Brexit discussions.
While EU leaders deemed that the UK has made enough progress in Brexit negotiations to progress to the next stage, concerns about the turn post Brexit trade discussions will take has kept pressure on Sterling.
Optimism was also undermined after EU Chief Brexit Negotiator Michel Barnier warned that the UK wouldn’t be getting a ‘bespoke and ambitious’ trade deal with the EU, and that leaving the single market would see London lose its financial passport.
Canadian Dollar (CAD) Exchange Rate Advances on Oil Price Uptick
The Canadian Dollar has recorded minor gains against the Pound today, but remains vulnerable to changes in crude oil prices.
Oil costs have risen marginally today, increasing to the region of $57.53 per barrel.
A dovish outlook from Bank of Canada (BOC) Governor Stephen Poloz has also had an impact on demand for the Canadian Dollar, despite many economists expecting steady future rate adjustments from the central bank.
GBP/CAD Forecast: Canadian Dollar Could be Boosted by Positive GDP Data
This week, Pound/Canadian Dollar exchange rate movement may be caused by UK government borrowing and GDP stats.
The UK GDP data could lend the British currency support as the Q3 GDP growth rate is tipped to be revised up on the quarter from 0.3% to 0.4%.
Further Brexit developments could also drive GBP, with any signs that the second stage of talks could progress faster than currently forecast being Sterling supportive.
The week’s Canadian news will consist of inflation rate stats on Thursday and Friday’s GDP report.
CAD could rise on the inflation stats, as traders predict stronger consumer price pressures in November.
GDP readings may be less impressive; estimates are for a reprint of 0.2% growth in October.