Pound Canadian Dollar (GBP/CAD) Exchange Rate Rises as Canadian CPI Figures Fall
The Pound Canadian Dollar (GBP/CAD) exchange rate is down today and currently trading around CA$1.7503.
The Canadian Dollar (CAD) failed to gain on the Pound (GBP) following the publication of the Bank of Canada’s (BoC) year-on-year CPI figures for January, which fell by 1.5% – a 15-month low.
These were also followed by Statistics Canada’s printing of the yearly CPI figures for January which also decreased below the expectation.
Doug Porter, a Chief Economist at BMO Capital Markets, commented:
‘I think the big story is we’re seeing the late 2018 slide in oil prices fully show up in the headline inflation.’
The Pound, meanwhile, has continued to be bolstered by Brexit optimism following Prime Minister Theresa May’s concession yesterday.
May said that MPs would have the power to vote for an extension to Article 50, or to remove a no-deal from the table, should her deal be rejected on 12 March.
May’s deal has also seen some unlikely backers, with Eurosceptic Tory MP Jacob Rees-Mogg saying he would back her deal if she put a time-limit on the Northern Irish backstop. And with the possibility of a no-deal receding, this has continued to benefit the Pound.
GBP/CAD Exchange Rate Rises as Votes Commence on Possible Extension of Article 50
Sterling (GBP) traders will be paying close attention to the House of Commons later, with a vote due to take place on a number of amendments to the withdrawal agreement.
Many of the amendments are pushing for an extension on Article 50 with Labour MP Yvette Cooper’s amendment particularly focusing on May’s mid-March ‘meaningful vote’ which will determine a possible extension of the Brexit process.
Yvette Cooper tweeted yesterday:
As a result of all our cross party arguments & our Bill, PM’s statement today accepts most of provisions of the Bill to provide for votes that can avert No Deal on March 29. We are still laying cross party amendments today in order to secure confirmation of PM’s commitment
— Yvette Cooper (@YvetteCooperMP) February 26, 2019
The Pound could rise further if a no-deal seems more unlikely following tonight’s vote.
CAD/GBP Exchange Rate Falls Despite Rising Oil Prices
The Canadian Dollar (CAD) has managed to benefit from rising oil prices following an unexpected fall in US crude inventories after Saudi Aribia was undeterred by US President Donald Trump’s pressure on OPEC to avoid increasing prices.
This came after Khalid al-Falih, the Saudi Energy Minister, commented:
‘We are taking it easy. The 25 countries are taking a very slow and measured approach. Just as the second half of last year proved, we are interested in market stability first and foremost.’
The ‘Loonie’ failed to gain against the stronger Sterling however, as Brexit optimism has continued to bolster the GBP/CAD exchange rate.
GBP/CAD Forecast: Sterling Could Rise if May’s Brexit Deal Gains Favour
Pound (GBP) traders will be looking ahead to tomorrow’s release of the Gfk consumer confidence figures for February, and with any signs of an increase this could prove Pound-positive.
Canadian Dollar (CAD) investors, meanwhile, will be focusing on geopolitical developments as well as tomorrow’s printing of the fourth-quarter current account figures, which are, however, expected to decrease.
The GBP/CAD exchange rate is expected to be driven by political factors for the rest of this week, and with the Brexit deadlock effectively broken, any signs of May’s deal gaining increasing traction will likely see the Pound surge against the ‘Loonie’.