GBP/CAD Exchange Rate Falls as May Clarifies Her Next Steps
UPDATE: The Pound (GBP) has fallen against the Canadian Dollar (CAD) today as Theresa May comes under increasing pressure to clarify her next steps, and has written to the President of the European Council, Donald Tusk, to request an extension to Article 50.
Sterling has further been weakened today after comments from May’s spokesperson confirmed fears that the UK is now in a political crisis following the ruling out of the third ‘meaningful vote’ by House Speaker John Bercow.
The Canadian Dollar, meanwhile, has risen against the Pound today despite a lack of any influential Canadian economic data, although it has been bolstered by rising oil prices.
House Speaker uses 1604 Convention Aimed at Preventing Time Wasting in House of Commons
UPDATE: The Pound (GBP) continued to fall against the Canadian Dollar (CAD) following Speaker John Bercow ruling out Prime Minister Theresa May’s third ‘meaningful vote’ on her Brexit deal if, that is, it remains fundamentally the same.
Bercow said:
‘There has been much speculation over the past week about the possibility of the Government bringing before the House a motion on Brexit for another so-called meaningful vote.’
However, if May is able to secure any substantial changes to her deal, this would enable a vote to go ahead in the House of Commons.
Sterling traders, meanwhile, are remaining cautious as it is unlikely that either May or the EU will be able to secure any modifications to the Brexit deal ahead of any vote this week.
GBP/CAD Exchange Rate Sinks as May Struggles to Gain Support for Third ‘Meaningful Vote’
The Pound Canadian Dollar (GBP/CAD) exchange rate is down by over 0.3% today and is currently trading around CA$1.7666.
Sterling struggled against the Canadian Dollar today following news that Prime Minister Theresa May could postpone her third ‘meaningful vote’ ahead of Wednesday this week, if she fails to gain support for her new deal from the DUP and rebel Tory MPs.
The Conservative MP John Baron has also criticised May’s deal today, saying:
‘The deal remains flawed. The backstop’s legal risk remains unchanged – we could be trapped indefinitely. I will vote against.’
Brexit Uncertainty Hampers Pound (GBP) Exchange Rates on Currency Markets as Canadian Dollar (CAD) Rises along with WTI
Brexit uncertainty is continuing to dampen market confidence in the Pound (GBP) today, as doubts are continuing to increase that May’s scheduled 20 March vote is looking less likely as Conservatives and DUP fail to show any capitulation on the withdrawal agreement.
The Canadian Dollar (CAD), meanwhile, has gained on the weakened Pound today on a lack of Canadian economic data, while the oil-reliant ‘Loonie’ has benefited from the price of West Texas Intermediate oil, which has increased almost equal to last week’s peak.
CAD has also benefited from the US-China trade war showing signs of easing, and with President Donald Trump due to meet Chinese President Xi Jinping later in March, some ‘Loonie’ investors have become increasingly optimistic.
GBP/CAD Exchange Rate Falls as Brexit Uncertainty Weakens Confidence in Sterling
Sterling, however, is being plagued by continuing Brexit developments, and with rumours now circulating that there could be a potential nine-month delay to the UK’s withdrawal from the EU, this has caused GBP to sink further.
Tory rebel, Jacob Rees-Mogg, has however given reason for hope, as he has indicated that he would back May’s deal if the DUP also agree.
Rees-Mogg commented:
‘Mrs May’s deal, however bad it is, means that we are legally outside the European Union. If we remain, we will never leave. We have got as close to leaving as we will ever get under these circumstances. If it is thwarted now no one is ever going to allow us another chance to have a vote.’
The Pound was further weakened following the publication of the year-on-year Rightmove House Price Index which fell by -0.8% against February’s 0.2%.
Miles Shipside, a director at Rightmove, said:
‘Buying activity remains cooler than usual, with hesitation as some buyers await a more settled political climate.’
CAD/GBP Forecast: ‘Loonie’ Could Rise Further on US-China Trade Talk Progression
Pound (GBP) traders will be looking ahead to tomorrow’s release of the ILO unemployment rate figures for January, which are expected to hold steady at 4%.
These will be followed by the publication of the UK average earnings figures excluding bonus for January, and if these show any signs of improvement this could prove Pound-positive.
Canadian Dollar (CAD) investors, meanwhile, will be looking ahead to Friday which will see the publication of the Canadian retail sales figures for January.
The GBP/CAD exchange rate will likely remain sensitive to political developments this week with Brexit remaining in the spotlight, however the ‘Loonie’ could rise further if there are any signs of the trade talks between the US and China progressing.