House of Lords Set to Debate Brexit Bill, GBP CAD Exchange Rate Rallies

February 20, 2017 - Written by Ben Hughes

STORY LINK House of Lords Set to Debate Brexit Bill, GBP CAD Exchange Rate Rallies

The GBP CAD exchange rate has rallied by around a cent from its starting levels today as investors are optimistic about the possibility of the House of Lords making amendments to the government's Article 50 legislation.

Pound Canadian Dollar (GBP CAD) Climbs as Peers Debate Brexit Bill

The Pound Canadian Dollar (GBP CAD) exchange rate surged this morning as markets are hopeful that the House of Lords will seek to amend the government's Brexit bill.

With the Conservatives lacking an outright majority in the House of Lords traders are optimistic that Labour and Lib Dem peers will block the bill until they obtain certain concessions.

In speaking to the Guardian Dick Newby, the leader of the Lib Dems in the House of Lords remained confident that potential amendments would receive enough cross-party support to pass, saying;

‘There are a lot of members of the group for whom Europe is the big thing that has motivated them in politics, we were complacent, truth be told. But things have turned and people on our side feel very strongly about it.’

Investors expect that the Lords will seek to make sure that the rights of EU citizens in the UK are protected, while also pushing for parliament to be given a final say on the government’s Brexit deal.

However markets may find that they are being over-optimistic as the Lords have historically been reluctant to block a government bill once it has reached this point and it would be quite unusual for the House to vote against it.

Canadian Dollar Subdued as Oil Price Upset by Rise in US Production

The Canadian Dollar has fallen this morning despite a slight uptick in oil prices as investors predict that US output will soon drag on crude.

Jeffrey Halley, senior market analyst at futures brokerage OANDA in Singapore was notably downbeat about the prospects of oil prices rising further as he said;

‘Sustained gains above $55 a barrel, and a hoped for rally to $60 a barrel, (are) both proving incredibly tough nuts to crack, at the crux of the matter is that 90 percent OPEC compliance is being balanced by ever increasing U.S. shale production.’

OPEC and other producers such as Russia had previously agreed to cut production by 1.8 million barrels a day for the first six months of 2017 in order to raise prices. However analysts now predict that this will have to be extended if it is to have any notable impact on global surplus.

GBP CAD Exchange Rate Forecast: UK Public Sector Borrowing Ahead

The GBP CAD exchange rate may climb tomorrow with the release of the UK’s latest Public Sector Borrowing figures as economists expect the public deficit to fall from £6.4bn to -£14.5bn in January.

Meanwhile ‘Loonie’ sentiment is likely to be impacted by Bank of Canada’s Carolyn Wilkins speech on Tuesday, with the Canadian Dollar having the potential to retreat further if she presents a dovish outlook for future rate hikes.

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