Pound to Canadian Dollar Exchange Rate Advances Slow amid Canadian Dollar Resilience
While the Pound (GBP) has seen strong gains against many major rivals this week amid UK election speculation, the Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate has slipped from its best levels and its advances have slowed.
Since opening this week at the interbank level of 1.71, GBP/CAD has been trending with a solid upside bias due to the market’s UK election speculation.
However, GBP/CAD has been unable to hold the half-year-high of 1.73 seen yesterday, due largely to optimism from the Bank of Canada (BoC) boosting demand for the Canadian Dollar (CAD).
While GBP/CAD is trending in the region of 1.73 at the time of writing today, it remains over half a cent below yesterday’s 6-month-high.
Investors are hesitant to move too much on the Canadian Dollar ahead of key Canadian job market data due for publication tomorrow.
Pound (GBP) Exchange Rates Strong as Investors Price in Conservative Party Election Win
Despite a lack of fresh supportive UK data or polling in recent sessions, investors have been piling into the Pound (GBP).
This has largely been due to markets betting on a Conservative majority outcome for next week’s UK General Election. A Conservative majority has been seen as Pound-positive amid expectations it will make a no-deal Brexit outcome less likely than a hung Parliament would.
While the opposition Labour Party had been narrowing the Conservative lead slightly over the past week, polling averages appear to have steadied in recent sessions, boosting market hopes that polls will remain steady until election day.
Adam Cole, Chief Currency Strategist at RBC Capital Markets in London, said:
‘The broad trend in the polls is not really changing now and the Conservative lead on my poll of polls is about 11 percentage points, which is reasonably sufficient to get them a reasonably decent majority,
With only a week to run to the election, if the trend in the polls stays flat, then Sterling probably keeps going up.’
Canadian Dollar (CAD) Steadies on Bank of Canada’s (BoC) Optimistic Tone
The Pound (GBP) gained against many major currency rivals today, but its gains against the Canadian Dollar (CAD) have been limited.
Market demand for the Canadian Dollar has firmed since yesterday, when the Bank of Canada (BoC) took a more neutral stance than expected tone on Canada’s economic outlook.
Many investors had been concerned that weakness in Canadian data, combined with global trade jitters, could pressure the BoC into taking a more dovish tone on Canadian monetary policy.
However, the BoC showed confidence that the domestic and global economic outlooks were showing signs of recovery, and showed no urge to ease Canadian monetary policy any time soon.
The BoC has been one of the few major central banks to not cut interest rates amid this year’s global growth slowdown.
This is keeping the Canadian Dollar buoyed. For now though, investors are hesitant to move too much on CAD amid anticipation for upcoming major Canadian data.
Pound to Canadian Dollar (GBP/CAD) Exchange Rate Investors Awaiting Canadian Job Report
The Pound (GBP) may be in for a bumpy week, as a week from today the British public will head to the polls for the 12th of December General Election.
Even if polls remain steady, the Pound could see solid demand, but shifts in polls up until election day could lead to sharp Pound movements if they are unexpected.
With the Pound likely to drive sharp GBP/CAD movement on political news, Canadian Dollar (CAD) investors are eagerly awaiting data due for publication in the coming days.
This afternoon will see the publication of Canada’s October trade balance results, as well as the November Ivey PMI. As the Canadian Dollar is a trade-correlated currency, stronger Canadian export stats could boost CAD demand.
Tomorrow’s Canadian job market report from November could be even more influential for Canadian Dollar movement.
If Canada’s November job market stats beat forecasts, the Pound to Canadian Dollar (GBP/CAD) exchange rate is more likely to shed some of this week’s solid gains as the Canadian economic outlook would improve.