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Pound Sterling Canadian Dollar (GBP/CAD) Exchange Rate Muted Ahead of Trump-Xi Meeting

June 27, 2019 - Written by John Cameron

Pound Canadian Dollar (GBP/CAD) Exchange Rate Flat as Washington and Beijing Make Tentative Trade Truce

The Pound Sterling Canadian Dollar (GBP/CAD) exchange rate rose and the pairing is currently trading at an inter-bank rate of CA$1.6681.

On Thursday, China’s Commerce Ministry spokesman has said that the United States should immediately cancel sanctions on Chinese telecoms giant, Huawei.

Spokesman, Gao Feng stated that China opposes Washington’s abuse of export controls and urged them to return to a state of co-operation.

The Canadian Dollar remained under pressure ahead of Saturday’s meeting between US President Donald Trump and Chinese leader, Xi Jinping.

Reports revealed that Beijing and Washington made a tentative truce ahead of the G20 summit.

Trump’s agreement to avert $300 billion worth of additional tariffs is reported to be part of Xi Jinping’s condition for holding the meeting.

Meanwhile, the Canadian Dollar strengthened on Wednesday on the prospect of a US interest rate cut.

However, the ‘Loonie’ remained muted on Thursday. If the US and China agreed not to impose tariffs, the US Federal Reserve would no longer need to cut interest rates.

Sterling (GBP) Muted as UK Car Production Plummets

Sterling remained flat against the ‘Loonie’ as data showed UK car output declined for the 12th successive month.

Car production slumped by 15.5% in May due to falling demand, both at home and abroad as well as model changes.

Thanks to Brexit uncertainties some plants closed in preparation for a no-deal Brexit which partly caused car output to fall by 21% so far this year.

Meanwhile, the Society of Motor Manufacturers and Traders (SMMT) have warned that the sector could be crippled by a ‘seismic’ no-deal Brexit on 31 October.

Commenting on Thursday’s data, SMMT Chief Executive Mike Hawes stated:

‘12 consecutive months of decline for UK car manufacturing is a serious concern and underlines yet again the importance of securing a Brexit deal quickly.’

Pound Canadian Dollar Outlook: Will Disappointing GDP Weigh on CAD?

Looking ahead to Friday, the Pound (GBP) could rise against the Canadian Dollar (CAD) following the release of the UK GDP figure.

Sterling could be buoyed if data shows that GDP rose higher than forecast in the first three months of 2019.

Meanwhile, the ‘Loonie’ could slide following the release of its monthly GDP data.

If GDP contracts or is left stagnant in April, it could cause the Pound Canadian Dollar (GBP/CAD) exchange rate to rise.

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