GBP/CAD Exchange Rate Flat as Brexit and Leaderships Development Fail to Manifest
UPDATE: The Pound Canadian Dollar exchange rate remained steady today on a lack of UK economic data, while Sterling traders became increasing agitated on the lack of any clear developments on Brexit, or around the possible new leader of the Conservative Party.
The Canadian Dollar, meanwhile, failed to benefit from the publication of the Canadian Ivey purchasing managers index figures for May, which came in below the consensus increase of 56.7 and remained steady at 55.9.
These were, however, followed by the non-seasonally-adjusted figures, which shot up above forecast at 61.8, although provided little uplift for the Canadian Dollar.
GBP/CAD Exchange Rate Falls as US-China Collide Over Rare Earth Exports
The Pound Canadian Dollar (GBP/CAD) exchange rate is down slightly today and is currently trading around CA$1.7017 on the interbank market.
The Canadian Dollar (CAD) rose against the Pound (GBP) despite the ongoing US-China trade war continuing to weigh on market confidence in the trade-sensitive Canadian economy.
This came after the US warned of disruption over rare earth exports, which China has threatened to stop selling in a strategy to counteract the US’ recent tariffs on Chinese exports.
The US Commerce Department stated in its report:
‘If China or Russia were to stop exports to the United States and its allies for a prolonged period – similar to China’s rare earths embargo in 2010 – an extended supply disruption could cause significant shocks throughout US and foreign critical mineral supply chains.’
The Pound (GBP) meanwhile has been held back by Brexit concerns following the Environment Secretary, Michael Gove, saying that the 31 October Brexit leave date is ‘not wedded’ and altogether ‘arbitrary’.
Mr Gove said:
‘If we’re so close to the wire with what I believe is a better deal, it would be right to take those extra few days or weeks in order to land it and to make sure that we’re out.’
GBP/CAD Exchange Rate Sinks as Traders Await Carney Speech
Sterling traders will be paying close attention to the Governor of the Bank of England Mark Carney, as he is due to deliver a speech. Any dovish comments about the state of the UK economy would likely see the GBP/CAD exchange rate slip further.
However, as Theresa May is set to step down as Conservative leader tomorrow, uncertainty surrounding Brexit and the future leadership has weighed on market sentiment in Sterling.
US President Donald Trump’s state visit to the UK overshadowed political news surrounding Brexit, and now that the week draws to a close, many Pound Sterling traders are becoming increasingly jittery.
CAD/GBP Exchange Rate Edges Higher as CAD Traders Brace for Trade Figures
Canadian Dollar (CAD) traders are awaiting the publication of the Canadian international merchandise trade figures for April today, which are expected to ease at $-2.80bn.
These will be followed by the Ivey Purchasing Managers Index figures for May, which are expected to fall slightly, potentially weakening the CAD/GBP exchange rate.
The Canadian imports and exports figures for April are also due out today, and with any signs of improvement, this could provide an uptick for the Canadian Dollar (CAD).
CAD has also been struggling this week as oil prices fell to its lowest since January, and with oil being one of Canada’s major exports, this has weighed on the ‘Loonie’.
CAD/GBP Forecast: Sterling Likely to be Held Back as Brexit and Leadership Uncertainty Rises
Canadian Dollar (CAD) investors will be looking ahead to tomorrow’s publication of the Canadian unemployment rate figures, which are expected to hold steady at 5.7%.
These will be followed by the Canadian net change in employment figures for May, which are expected to ease at 8.0k.
Pound traders, however, will keep an eye on the UK Halifax house prices figures for May, and with any improvement, this could bring back some positive market sentiment for the Pound.
The Pound Canadian Dollar (GBP/CAD) exchange rate will, however, remain driven by political developments into next week, and with uncertainty surrounding the PM and Brexit, this is likely to hold back the currency.