Pound Sterling Canadian Dollar Exchange Rate News: GBP/CAD Strengthened by Positive Brexit Headlines

Pound Sterling (GBP) Exchange Rates Firm as UK Wage Growth Nears 10-Year High

The Pound (GBP) is accelerating against the Canadian Dollar (CAD) and the majority of its other peers this morning, following the release of the UK’s latest labour statistics.

The focus for GBP investors today was undoubtedly the UK’s latest wage report, which fortunately for Sterling showed that wage growth (excluding bonuses) continued to rise in September, going from 3.1% to 3.2%.

Analysts are hopeful that wages will continue to trend higher in the coming months as a narrowing pool of talent forces firms to offer better contracts.

Mike Jakeman, senior economist at PwC explains:

‘This data suggests that the labour market is now pretty tight. Unemployment remains very low in historic terms, but is unlikely to fall much further, given the slowdown in job creation.

‘The result of this is likely to be further upward pressure on wages as companies struggle to find workers to fill vacancies. We are likely to hear much more about worker shortages in the coming year.’

GBP/CAD Exchange Rate Buoyed by Brexit Optimism

The Pound Sterling Canadian Dollar (GBP/CAD) exchange rate accelerated last week, as Sterling sentiment was lifted by hopes on an imminent Brexit deal.

This optimism saw GBP race higher throughout the first half of the week, with reports of a ‘secret’ customs agreement and a ‘thumbs up’ from Brexit Secretary Dominic Raab following a crunch meeting in Downing Street appearing to be the main catalysts for the rise.

Renewed Brexit optimism mixed with US political uncertainty and sliding oil prices then saw GBP/CAD peak at a three-week high on Wednesday.

The latter half of the week saw the pairing’s momentum begin to sputter however, with the Canadian Dollar able to recoup some losses on Thursday thanks to a stronger-than-expected Ivey PMI.

The week then culminated with the sudden resignation of UK Transport Minister Jo Johnson in opposition of Theresa May’s Brexit plans, which saw the GBP/CAD close the session around a cent off its best levels.

GBP/CAD Exchange Rate Forecast: Will Rising UK Inflation, Help Sterling to Overcome Brexit Uncertainty?

Looking ahead to the second half of this week’s session, the Pound Sterling Canadian Dollar (GBP/CAD) exchange rate may continue to rally following the publication of the UK’s latest Consumer Price Index (CPI).

Economists forecast tomorrow’s CPI figures will reveal inflation edged up from 2.4% to 2.5% in October, potentially strengthening Sterling on hopes it would bolster the odds of the Bank of England (BoE) raising interest rates in 2019.

However these gains in GBP may prove short lived unless Theresa May is able to garner support for a potential Brexit deal by the end of the week to allow for a special Brexit EU summit to take place later in the month.

Meanwhile the Canadian Dollar may firm in the latter half of the week, with Canada expected to report another robust lift in employment when October’s ADP payroll figures come out.

Luke Trevail

Luke studied Journalism at university but quickly moved into the financial sector, initially working in retail banking before joining TorFX in 2007. As a Senior Account Manager Luke assists in overseeing the management of the company’s exposure to currency volatility. He uses his years of foreign exchange experience to produce regular news updates exploring the latest currency movements.

Contact Luke Trevail