Last week opened with the Pound trading at a level of CA$ 1.6997 on Monday. At the end of the week, the GBP/CAD exchange rate closed down lower in the region of CA$ 1.7120.
GBP/CAD Exchange Rate Steady on Mixed Brexit Forecasts
The Pound (GBP) has traded in a narrow range against the Canadian Dollar (CAD) today, with contrasting opinions on Brexit limiting GBP/CAD exchange rate movement.
The Irish border is in the spotlight, with months of stalled talks over the issue highlighting how slowly talks are progressing.
At the centre of the disagreement is the Democratic Unionist Party (DUP), which has warned that unless it stays out of the EU customs union, the party could vote down the UK government’s budget plans later this month.
Giving his thoughts on the contentious issue, Irish Prime Minister Leo Varadkar has suggested delaying the already-extended deadline from November to December:
‘We are at a sensitive phase and I know some people were optimistic about an agreement on the withdrawal protocol this week, [but] I have to say I always thought that was unlikely, I figure November or December the best opportunity for a deal.’
On the one hand, kicking the Brexit can down the road reduces the likelihood of an immediate exit from the EU without a deal.
On the other, however, it only represents an extension of already stalled and acrimonious Brexit negotiations.
The underlying assumption could be that as the Irish border issue hasn’t been solved after over two years of talks, there might be no easy answer and moving the deadline to December only delays the inevitable.
Canadian Dollar to Pound (CAD/GBP) Exchange Rate Static despite Oil Price Rise
On the other side of the currency pairing, the Canadian Dollar (CAD) has held steady against the Pound (GBP) on oil price news.
The cost of crude oil has ticked higher recently, which has supported the Canadian Dollar because it benefits national oil exporters.
The downside to this news is that there are still worries about future demand for Canada’s crude oil, which has stopped the recent price rise from having an overwhelmingly positive effect.
According to commodities market experts, the oil price rise comes from growing suspicion about oil-producer Saudi Arabia due to the disappearance of journalist Jamal Khashoggi, who vanished after visiting the Saudi consulate in Istanbul.
Pound Canadian Dollar (GBP/CAD) Exchange Rate Forecast: Is Pound Sterling Turbulence ahead on PM’s Brexit Speech?
There could be Pound to Canadian Dollar (GBP/CAD) exchange rate volatility this afternoon, when Prime Minister Theresa May gives a speech in the House of Commons.
The contents of the PM’s speech are not yet known, but her remarks could focus on the current progress of Brexit talks and whether a breakthrough is likely.
In the best-case scenario, the PM might reveal news of major progress in the Brexit process that causes the Pound to rise sharply against the Canadian Dollar.
The negative outcome would be the PM stating that talks are stalled and at an impasse; the GBP/CAD exchange rate could crash if a no-deal Brexit seems highly likely.
Beyond the uncertainty of the PM’s upcoming speech, the Pound could decline when Tuesday’s UK jobs market data is released.
This might reveal a slowdown in the pace of wage growth alongside a rise in the number of persons claiming unemployment benefits, which would both be negative developments.
UK economic news will remain in the spotlight on Wednesday, with the morning bringing inflation rate data for September.
A slowdown in monthly and annual inflation rates has been forecast, which might mean that any existing losses against the Pound are extended on Wednesday.
Proving that this week’s economic news could be highly variable, Wednesday afternoon’s Canadian manufacturing sales reading for August is anticipated to drop by -0.6%; this could limit trader demand for the Canadian Dollar.
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TAGS: Pound Canadian Dollar Forecasts