June 12, 2019 - Written by John Cameron
STORY LINK Pound Canadian Dollar (GBP/CAD) Exchange Rate Rises as US-China Trade War Weighs on ‘Loonie’
GBP/CAD Exchange Rate Rises as Oil Prices Slip
The Pound Canadian Dollar (GBP/CAD) exchange rate edged higher today and is currently trading around CA$1.6929 on the interbank market.
The Canadian Dollar (CAD) fell against the Pound (GBP) as the global trade war is weighing heavily on the trade-reliant Canadian economy, leaving many investors remaining cautious as the US-China relationship continues to sour.
Oil prices also dropped by 2% this morning, leaving the oil-sensitive ‘Loonie’ wanting as it fell against an improving Pound.
The US-China trade war has become an increasing weight on the Canadian economy, with rising fears that the two superpowers could drag their differences on for a long time to come.
Johan Gott, the Head of Trade Wargaming initiative, commented:
‘There is growing bi-partisan support for a tougher stance on China. If Trump were to be seen as soft on China, Democrats are likely to use that against him. Republicans are also unified in a hard stance against what is increasingly seen as a threat to the US. There is no such bi-partisan agreement against Canada and Mexico.’
GBP/CAD Exchange Rate Improves as Labour Party Pushes to Block No-Deal Brexit
The Pound rose today as the Labour Party has pushed to block the next Prime Minister from forcing through a no-deal on 31 October.
Keir Starmer, the shadow Brexit Secretary, commented:
‘MPs cannot be bystanders while the next Tory prime minister tries to crash the UK out of the European Union without a deal and without the consent of the British people. That’s why we are taking this latest measure to end the uncertainty and protect communities across the country.’
Boris Johnson, the current Tory leadership favourite, has also kicked off his campaign today, although many Sterling traders are remaining jittery as he is a known hard-Brexiter.
Mr Johnson has stated his determination to leave the EU by 31 October, causing fears of a no-deal Brexit should this not be possible.
‘I am not aiming for a no-deal outcome, I don’t think we can end up with any such thing. But it is only responsible to prepare vigorously and seriously.’
GBP/CAD Forecast: Sterling Could Fall if No-Deal Fears Rise
Pound traders will be looking ahead to tomorrow’s printing of the UK RICS housing price balance figures for May, which are expected to sink by -21%.
‘Loonie’ investors, meanwhile, will be awaiting the Canadian new housing price index figures for April, and with any signs of improvement this could provide some uplift for the Canadian Dollar.
However, with global trade tensions remaining in the spotlight, this is likely to be the main driver behind the Canadian Dollar.
The Pound Canadian Dollar exchange rate is likely to be driven by political developments for the rest of the week, with the Conservative Party leadership contest remaining in focus, while Brexit will also become an increasing concern, as no-deal fears may rise if Boris Johnson becomes more favourable.
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TAGS: Canadian Dollar Forecasts Pound Canadian Dollar Forecasts