Pound to Canadian Dollar Exchange Rate Gains Limited Ahead of Canadian Growth Report
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate has seen solid gains since yesterday, thanks largely to a jump in Pound (GBP) support. However, investors are hesitant to sell the Canadian Dollar (CAD) too much ahead of key data due tomorrow.
Following last week’s ultimately small movement in GBP/CAD, could the pair see more solid gains this week? GBP/CAD opened this week at the interbank level of 1.70 and has since climbed to trend near the level of 1.71.
This puts it just below last week’s 6-month-best level of 1.72, and over a cent above the week’s opening levels.
Pound movement is likely to become even more focused on UK politics going forward, while Canadian Dollar investors await US-China trade developments and key Canadian growth stats.
Pound (GBP) Exchange Rates Jump as UK Election Poll Signals Conservative Majority
The Pound (GBP) saw mixed movement earlier in the week, as a trio of fresh polls showed that Britain’s opposition Labour Party was gaining on the ruling Conservative Party with mere weeks until the 2019 General Election next month.
After a couple of days of Pound weakness though, the British currency has seen a jump in demand since last night.
Last night saw the publication of YouGov’s MRP poll, a poll which predicts how many seats each party will win rather than voting share.
The poll, known for predicting the 2017 hung Parliament outcome, predicted that the ruling Conservative Party would win a solid majority, likely enough to push its Brexit deal through Parliament.
The Pound advanced on the news and remained strong this morning.
Sterling remains higher overnight:#GBP +0.09% against other currencies#GBPUSD 1.2945 +0.18%#EURGBP 0.85045 -0.11%#GBPAUD 1.91324 +0.33%#GBPJPY 141.69 +0.09%#GBPCAD 1.72019 +0.22%#GBPCHF 1.29363 +0.18%#GBPEUR 1.17585 +0.11% pic.twitter.com/wxvDSvuUSJ
— IGSquawk (@IGSquawk) November 28, 2019
Canadian Dollar (CAD) Exchange Rates Lack Drive as Investors Await Canadian Growth Report
The Canadian Dollar’s (CAD) movement has been limited this week. Strong Canadian wholesale sales data at the beginning of the week wasn’t enough to keep the currency buoyed amid market anticipation for key growth data due on Friday.
Despite signs that the Bank of Canada (BoC) is unlikely to become more dovish going forward, investors are still anxious about the upcoming Canadian growth rate report.
This is because if growth slows more than expected, it could cause BoC rate cut speculation to return.
On top of growth rate anticipation limiting CAD movement, the Canadian currency’s appeal is being kept under pressure by fresh concerns that US-China trade relations are worsening again after US President Donald Trump signed a bill supporting Hong Kong protestors.
According to Amo Sahota, Director at Klarity FX:
‘I think we are in a hiatus move (for the Loonie) until we get the GDP data,
That is going to be the key driver, otherwise I think it is still trading risk-on, risk-off with the US-China trade agreement focus.’
Pound to Canadian Dollar (GBP/CAD) Exchange Rate Awaits Canadian Growth Report
With markets hesitant to move too much on the Canadian Dollar (CAD) before Canada’s latest growth results come in, the Pound to Canadian Dollar (GBP/CAD) exchange rate could see some late-week movement following the data tomorrow.
Canadian growth is expected to have grown at 0.1% month-on-month, with the Q3 growth rate expected to slow from 3.7% to 1.3% year-on-year.
If Canadian growth misses the mark, Bank of Canada easing speculation is likely to return. Stronger data would instead boost the Canadian Dollar and limit this week’s GBP/CAD gains.
US-China trade relations will also remain in focus. Signs of further tensions between the nations will weigh on trade-correlated currencies like CAD.
The Pound’s movement is likely to remain focused on UK election polling and speculation, so further polls could also cause movement in the Pound to Canadian Dollar (GBP/CAD) exchange rate.