GBP/CAD Exchange Rate Rises as UK Brexit Hopes Rise on Cross-Party Talks
UPDATE: The Pound (GBP) continued to rise against the Canadian Dollar (CAD) following comments from the UK Foreign Secretary, Jeremy Hunt, who said that cross-party talks between the Conservatives and the Labour Party were proving ‘more constructive’.
Mr Hunt added:
‘I don’t think we should rule out the possibility of getting some agreement across the House of Commons.’
The ‘Loonie’, meanwhile, failed to gain on Sterling today as traders continue to flee to riskier currencies as US-China trade talks seem to be developing towards a conclusion.
Many CAD investors, however, are awaiting today’s publication of the Canadian Bank of Canada (BoC) Business Outlook Survey report, and with any signs of bullishness about the Canadian economy, this could see the currency recover.
GBP/CAD Exchange Rate Increases as US-China Trade Talks near Conclusion
The Pound Canadian Dollar (GBP/CAD) exchange rate rose 0.3% today and is currently trading around CA$1.7461 on the inter-bank market.
The Canadian Dollar (CAD) fell against the Pound (GBP) as traders moved into riskier assets as the two economic superpowers, the US and China, appear to be in their final leg of trade talks.
This came following comments from Steven Mnuchin, the US Treasury Secretary, who issued a generally positive outlook for the trade talks over the weekend, saying:
‘We are making progress … I think we’re hopeful that we’re getting close to the final round of concluding issues… [T]his is a very, very detailed agreement covering issues that have never been dealt with before [and] way beyond anything that looked like a bilateral investment treaty.’
Gloominess surrounding the price of oil has weighed on the ‘Loonie’ today, with many forecasters seeing the recent bout of higher prices is about to wear thin following the West Texas Intermediate’s recent high of $64 per barrel.
Mazen Issa, a Currency Strategist at the Toronto-Dominion Bank, was pessimistic about the effect on CAD, saying:
‘We’re basically looking at a situation that is very difficult to find any positives for the Canadian dollar overall. In fact, it’s probably going to continue to get worse.’
GBP/CAD Exchange Rate Edges Higher as UK House Prices Surge
The Pound, meanwhile, has benefited from the publication of the Rightmove House Price Index figures for April, which rose 1.1%.
Miles Shipside, a Director at Rightmove, commented:
‘We are not anticipating an activity surge but maybe a wave of relief that releases some pent-up demand to take advantage of static property prices and cheap fixed-rate mortgages.’
Brexit news, meanwhile, has been slow with cross-party talks continuing while most MPs away for the parliamentary Easter recess.
Some Labour and the Conservative MPs, however, will be continuing discussions in their absence.
David Lidington, Prime Minister Theresa May’s de facto deputy, restored some confidence in Sterling, claiming there had been progress between the two parties when he said:
‘I don’t think the question can be allowed to drag out for much longer … What we have found in terms of objectives… there is a fair bit that both parties would have in common. If we are going to find an agreement there needs to be movement on both sides.’
GBP/CAD Forecast: Sterling Could Rise if Brexit Political Deadlock is Challenged
Sterling traders are looking ahead to tomorrow’s publication of the UK ILO unemployment rate figures for February, which are expected to remain static at 3.9%.
These will be followed by the release of the UK average earnings excluding bonus figures for February, which are expected to show a slight rise.
Canadian Dollar investors, meanwhile, will be looking ahead to tomorrow’s publication of the Canadian manufacturing shipments figures for February.
In the absence of much economic data, the GBP/CAD exchange rate will once again remain sensitive to Brexit developments, and any signs of a cross-party consensus emerging, we could see the Pound rise as the political deadlock is challenged.