Pound Sterling Canadian Dollar (GBP/CAD) Exchange Rate Muted on Conservative Victory Hopes
The Pound Sterling Canadian Dollar (GBP/CAD) exchange rate was left flat, and the pairing is currently trading at around CA$1.7078.
The Pound was left muted against the Canadian Dollar on Tuesday as investors awaited tonight’s debate.
Tonight will see a live head-to-head ITV debate between Prime Minister Boris Johnson and Labour’s Jeremy Corbyn.
YouGov is also expected to release a poll following the debate that could provide GBP with further support if it reveals the Conservatives continue to remain ahead in the polls.
On Monday, Sterling was provided with an upswing of support following the Prime Minister’s announcement that all Tory Party candidates would support his Brexit deal.
This increases the chance of Johnson’s deal being secured through the House of Commons before the January deadline.
Added to this, a poll from ICM revealed the Conservative Party had extended their lead over Labour to 10 points.
Commenting on this, ACLS Global strategist, Marshall Gittler said:
‘[The Pound] continued to edge higher on hopes that the Conservatives get a majority.
‘While the results of the election in terms of how many seats each party gets are still up in the air, the effective results are actually quite simple and binary.’
Canadian Dollar (CAD) Flat as US-China Pessimism Sends Oil Prices Lower
The risk-sensitive ‘Loonie’ was left under pressure as oil prices extended losses on Tuesday thanks to limited progress in US-China trade negotiations and an unexpected rise in US crude inventories.
On Monday, CNBC reported that Chinese officials grew increasingly worried about President Trump’s comments about phasing out existing trade tariffs.
The report also said that Beijing was pessimistic about agreeing to a ‘phase one’ trade deal which weighed on oil prices.
Commenting on the ‘phase one’ deal, Vishnu Varathan, head of economics and strategy at Mizuho Bank’ Asia Treasury Department in Singapore said:
‘There are some lingering doubts over whether a phase one deal can be struck. The suspicion is that there’s a lot more wrinkles to iron out than initially thought.’
The 16-month trade war has weighed on economic growth prospects and clouded the outlook for oil demand, hurting prices.
Commenting on this, analyst at brokerage OANDA, Craig Erlam said:
‘The less than promising reports coming from China on the trade war may have taken some of the energy out of the rally. We’re certainly seeing less momentum in the recent rallies.’
Pound Canadian Dollar Outlook: Will Lower Oil Prices Weigh on CAD?
This afternoon, the Canadian Dollar (CAD) could slump against the Pound (GBP) following the release of September’s Canadian manufacturing sales.
If sales slump further than expected, it will likely weigh on the ‘Loonie’.
Meanwhile, further reports of US-China trade tensions could weigh on global oil demand, lowing prices and weigh on CAD.
If oil prices extend losses on Wednesday, the Pound Canadian Dollar (GBP/CAD) exchange rate could rise.