GBP/CAD Exchange Rate Rangebound as Hopes Over Extension of Article 50 Rise
The Pound Canadian Dollar (GBP/CAD) exchange rate is rangebound today and is currently trading at around CA$1.7094 on the inter-bank market.
The Pound (GBP) has steadied against the Canadian Dollar (CAD) after Prime Minister Theresa May survived the no-confidence vote against her government last night – by just a slim majority of 19 votes.
May, who now has until 21 January to present a new Brexit deal to the EU, commented:
‘It will not be an easy task, but MPs know they have a duty to act in the national interest, reach a consensus and get this done.’
Today will see cross-party talks in which May will discuss the next steps for Brexit, although Labour leader, Jeremy Corbyn, has demanded that a ‘no deal’ Brexit be rejected first.
Pound investors were hopeful that May had not ruled out an extension of Article 50, following reports that the EU would also be willing to extend the leaving date of 29 March.
CAD/GBP Exchange Rate Hindered by Oil Pipeline Capacity Issues
Canadian Dollar (CAD) investors, meanwhile, will be awaiting today’s publication of the ADP Employment Change figures for December, with any signs of an increase potentially restoring some confidence in the ‘Loonie’.
The Canadian oil industry is continuing to face problems over pipeline issue, with a recent poll from the Angus Reid Institute showing that six-in-ten Canadians see the lack of pipeline capacity constitutes a ‘crisis’.
With oil being Canada’s biggest export, signs of mounting problems in the oil industry are likely to cause downside pressure for CAD exchange rates.
GBP/CAD Exchange Rate Gains Limited despite Finance Minster’s Bullishness
The Canadian Dollar (CAD) has struggled to make any gains on the Pound (GBP) after yesterday’s publication of Canada’s motor vehicle sales for November, which showed a fall to 149.2k, continuing a longer term downwards trend.
GBP/CAD traders were left unmoved by some bullish comments from Canadian Finance Minister Bill Morneau on Wednesday, who remained optimistic about the economy after the strongest jobs numbers in 40 years.
Morneau, however, noted that there were troubling headwinds in the global economy, commenting on Brexit:
‘We don’t see this as something that’s directly problematic for the Canadian economy, but obviously it’s something that’s difficult for the global economy.’
The Canadian Dollar remains sensitive to signs of slowing global growth, and as Canada has a free trade deal with the EU, Brexit remains an influential factor for some ‘Loonie’ traders.
GBP/CAD Outlook: ‘Loonie’ Could Increase on Positive Inflation Figures
Pound (GBP) investors, meanwhile, will be looking ahead to tomorrow’s publication of the UK retail sales figures for December which are expected to decrease – potentially seeing Sterling fall against the Canadian Dollar.
Canadian Dollar (CAD) traders are also awaiting the release of the Bank of Canada’s yearly Core Consumer Price Index figures for December tomorrow, with any unexpectedly robust inflation likely offering support to the ‘Loonie’.
The GBP/CAD exchange rate will remain sensitive to further Brexit developments this week, with May continuing cross-party debates to formulate a new Brexit plan.
Nevertheless, if the EU remains steadfast on the issue of renegotiations, the Pound Canadian Dollar (GBP/CAD) exchange rate could suffer.