GBP/CAD Exchange Rate Strengthens On Brexit Hopes
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate accelerated this afternoon, lifted by Brexit optimism ahead of Theresa May’s latest trip to Brussels.
At the time of writing the GBP/CAD exchange rate has accelerated by roughly 0.4% so far today, propelling the pairing to a new one-week high.
Pound Sterling (GBP) Exchange Rate Buoyed as Ahead of May’s Brussels Trip
The Pound (GBP) accelerated against the Canadian Dollar (CAD) and the majority of its other peers on Tuesday afternoon amidst a upswing in Brexit sentiment.
This came in the wake of comments from Junior Business Minister, Richard Harrington in which he predicted that the UK would ultimately avoid a no-deal Brexit by Parliament taking control of the process and preventing such an outcome.
On top of this a spokesman for Theresa May told reporters that the PM still sought to reopen the EU withdrawal deal, bolstering optimism ahead of May’s trip to Brussels for what is expected to be an important meeting with the President of the European Commission, Jean-Claude Juncker on Wednesday.
This Brexit optimism also helped to offset the release of the UK’s latest labour figures earlier in the session, which saw Sterling struggle to build support after headline wage growth came in softer than expected in December.
Canadian Dollar (CAD) Exchange Rate Struggles to Find Momentum
At the same time, while Canadian traders may have returned from a three-day weekend it doesn’t appear to have spurred any movement in the Canadian Dollar (CAD) this afternoon especially as data remains thin on the ground.
The other main barometer for movement in the ‘Loonie’ also show little signs of life today, with oil prices largely unchanged for the session.
This may leave CAD exchange rate rangebound until Wednesday, with the release of the minutes from the Federal Reserve’s latest policy meeting potentially prompting movement in American markets.
GBP/CAD Exchange Rate Forecast: Further Split in Labour Party to Boost Sterling?
Outside of tomorrow’s Brexit meeting, movement in the Pound Canadian Dollar (GBP/CAD) exchange rate is likely to be driven by other political developments in the UK.
While GBP investors appear to have been unfazed by the departure of seven rebels from the labour party on Monday, analysts at ING predict that a further split in the party could prove positive for Sterling if it forces the leadership to reassess its support of Brexit.
However potentially undermining any gains will be the publication of the Confederation of British Industry’s latest Industrial orders data as economists forecast that order growth will have continued to contract this month.
Meanwhile CAD investors are likely to be focused on the release of Canada’s latest retail sales figures at the end of the week, with the Canadian Dollar likely to stumble if sales contracted again in December as forecast.