Pound Sterling Canadian Dollar (GBP/CAD) Exchange Rate Muted Ahead of UK Election
The Pound Sterling Canadian Dollar (GBP/CAD) exchange rate was left muted on Monday despite an upswing of UK election optimism. The pairing is currently trading at around CA$ 1.7392.
UK election optimism allowed the Pound to rally to a fresh seven-month high against the Canadian Dollar on Monday.
With just a few days left until Thursday’s UK general election, markets remained optimistic that the Conservative Party would be able to secure a majority.
Opinion polls also continued to show support for Boris Johnson’s party continued to grow, with the party gaining around 10 points ahead of the Labour Party.
However, there are still chances of a hung parliament and many have questioned whether a Tory win would mean a clean break from the EU by the end of 2020.
Added to this, this afternoon saw Sterling give up some of today’s gains. A further poll revealed the gap between the Conservatives and Labour narrowed, which weighed on GBP.
Canadian Dollar (CAD) Left Flat as Oil Prices Fall
On Monday, the Canadian Dollar was left under pressure as oil prices slipped after data revealed Chinese exports declined for the fourth consecutive month.
Markets were already concerned about damage to global oil demand thanks to US-China trade tensions, worries intensified.
Sunday’s Chinese export data showed that exports from the country fell by 1.1% from a year earlier, and to the US, exports plummeted by -23%.
Commenting on this, senior market analyst at OANDA, Jeffrey Halley stated:
‘China is clearly not immune to either US trade tariffs or the lingering slowdown in the broader global economy.’
Disappointing Canadian Homes Data Weighs on ‘Loonie’
On Monday afternoon, further data showed that Canadian housing starts rose by 0.3% in November compared to October.
According to the national housing agency, the increase was led by groundbreaking on multiple unit urban homes.
However, further data revealed that the value of Canadian building permits slumped by -1.5% in October.
Analysts expected an increase of 3%, so it is likely the decline weighed on the ‘Loonie’, leaving it flat against the Pound.
Pound Canadian Dollar Outlook: Will Oil Prices Continue to Fall?
Looking ahead, the Canadian Dollar (CAD) could continue to remain under pressure against the Pound (GBP) if oil prices continue to slide.
If further reports on heightened US-China tensions cause oil prices to slip further, the oil-sensitive ‘Loonie’ will fall.
Meanwhile, Sterling could fall following the release of October’s GDP figures.
If data reveals the economy has not expanded by the rate expected, it could weigh on the currency, and leave the Pound Canadian Dollar (GBP/CAD) exchange rate flat.
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TAGS: Pound Canadian Dollar Forecasts