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Pound to Canadian Dollar Exchange Rate Today: GBP/CAD Slumps as Brexit Uncertainty Overwhelms Sterling

December 3, 2018 - Written by John Cameron

GBP/CAD Exchange Rate Slumps as Brexit Fears Dominate

The temporary trade truce between the US and China that occurred over the weekend at the G20 Summit caused risk-correlated currencies rise, although this did little for GBP as Brexit fears took over.

The Canadian Dollar has been able to push back against Sterling, as the UK currency slips to CA$1.6731.

This afternoon saw the release of Canadian Markit manufacturing PMI for November, which has increased to 54.9, further bolstering the Canadian Dollar against Sterling.

The British Markit manufacturing PMI for November was also released today, which showed higher-than-expected figures, increasing to 53.1.

Despite the better-than-expected data release for Sterling, the GBP/CAD exchange rate was not able to capitalise as Brexit fears still dominated.

GBP/CAD Exchange Rate Slumps despite Positive PMI Figures from Sterling

Towards the end of last week’s session some positive figures were released in the UK, with Nationwide house prices increasing by a more-than-expected by 1.9% compared to last November, allowing Sterling to push back against the ‘Loonie’ at the end of last week.

In Brexit news, during the G20 Summit over the weekend British Prime Minister, Theresa May, told reporters:

‘For the first time in more than four decades, the UK will have an independent trade policy […] this deal sets a path for the UK to a brighter future has been affirmed by the discussions I’ve had on trade over the past two days with friends and partners making clear that they are keen to sign and implement ambitious free trade agreements as soon as possible.’

GBP/CAD Exchange Rate Volatile Last Week as Mixed Figures Released from Canada

Canadian data released towards the end of last week’s session showed the quarterly gross domestic product annualised for the third quarter rose by 2% - in line with expectations - which is still higher than predicted by the Bank of Canada, causing the GBP/CAD exchange rate to drop.

The raw material price index was also released at the end of last week’s session for Canada, which showed a further decline to -2.4%; despite this poor data release, the GBP/CAD exchange rates did not drop significantly as a result of this.

Outlook: GBP/CAD Exchange Rate to be Volatile as Withdrawal Act Parliament Vote Approaches?

Wednesday will see the release of the Bank of Canada’s latest interest rate decision with an accompanying forward guidance statement, it is forecast that there will be no change in the interest rate, but if there is CAD could appreciate markedly.

Movement in the Pound during the rest of this week’s session is likely to be a result of Brexit, as the deadline for the MPs to vote on Theresa May’s deal approaches.

UK business leader, Sir Ian Wood, has come out in support of Theresa May’s deal, stating:

‘It would be bad for Europe and it would be bad for the UK and it would take a long time to work our way through that and frankly I think the proposal that’s on the table, I think it is workable, I think it is better than we have, we’re out of Common Market membership but we’re retaining some of the advantages so I think it’s better than we have, and I think it’s a workable proposal.’

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