Pound Canadian Dollar Exchange Rate News: GBP/CAD Rangebound as UK Political Landscape Remains Unstable

January 31, 2022 - Written by John Cameron

STORY LINK Pound Canadian Dollar Exchange Rate News: GBP/CAD Rangebound as UK Political Landscape Remains Unstable

GBP/CAD Muted as UK Politics Remains Uncertain

The Pound Canadian Dollar (GBP/CAD) exchange rate is trading in a narrow range this morning as the UK and geopolitical landscape remains unstable, with Sue Gray’s report expected to be published imminently, as well as the unknown future regarding the Russia-Ukraine tensions.

At the time of writing, the GBP/CAD exchange rate is trading at approximately CA$1.7114, with minimal movement from today’s opening levels.

Pound (GBP) Rangebound as UK Awaits Sue Gray’s Report

The Pound (GBP) is trading flat against the Canadian Dollar (CAD) as the UK continues to wait for Sue Gray’s report into the 2020 lockdown misconduct.

The UK Prime Minister, Boris Johnson, remains under the microscope as the Met Police investigate his potentially illegal actions at Downing Street, and the findings of Gray’s report is yet to be published.

Meanwhile, Johnson is pushing his ‘Brexit Freedoms Bill’, a move which he claims will ‘further unleash the benefits of Brexit’.

The bill aims to amend of remove the remaining EU laws that have been kept following the UK’s departure from EU membership, and according to Number 10 it will be implemented ‘in due course’.

Johnson said:

‘The plans we have set out today will further unleash the benefits of Brexit and ensure that businesses can spend more of their money investing, innovating and creating jobs.

‘Our new Brexit Freedoms Bill will end the special status of EU law in our legal framework and ensure that we can more easily amend or remove outdated EU law in future’.

This is lifting the Pound’s appeal, in an otherwise dire political situation.

However, Labour shadow attorney general Emily Thornberry MP argued that for all the ‘freedom’ that the government continues to refer to, ‘they still refuse to make concrete change’.

Many individuals believe that Johnson is using Brexit to divert the attention away from Gray’s report which is leaving the Pound struggling against some of its peers this morning.

Canadian Dollar (USD) Mixed Despite Strong WTI Oil Prices

Meanwhile, the Canadian Dollar (CAD) is trading flat against the Pound (GBP) this morning in spite of strong WTI oil prices.

Currently, oil prices are maintaining a near multi-year high at $87.59 per barrel.

This is being supported by the global supply shortage fears and the geopolitical unrest as the Russian-Ukraine tensions continue to build.

In efforts to keep their citizens safe, the Canadian Government has decided to withdraw all non-essential staff and their families from the Canadian embassy in Ukraine, leaving and reinforcing only the absolute necessary personnel in the country.

Global Affairs Canada said:

‘As announced earlier this week, Canada will be reinforcing the team at the Canadian Embassy in Kyiv, Ukraine, with officials with expertise in areas such as security sector reform, conflict management, democratic reform, consular services and diplomacy.

‘Together, they will increase our diplomatic capacity and allow us to continue to assess and respond to the evolving situation in support of Ukraine.’

This is buoying CAD’s potential as the oil demands are likely to remain high as the geopolitical conflicts continue.

GBP/CAD Exchange Rate Forecast: Will CAD be Supported by PPI?

Looking ahead, the Pound Canadian Dollar (GBP/CAD) exchange rate is likely to be influenced by a range of data scheduled for release during the first half of the coming week.

Later this afternoon, CAD may be bolstered by December’s PPI figures which are forecast to increase from 0.8% to 1.5%.

However, on Tuesday, the ‘Loonie’ may be hampered by November’s GDP which is predicted to decrease from 0.8% to 0.4%.

A speech from Bank of Canada (BoC)’s deputy governor, Toni Gravelle, on Wednesday may also impact CAD’s potential.

On the other hand, the Pound may be influenced by the December’s Bank of England (BoE)’s consumer credit figures which is expected to ease from £1.2 billion to £0.7 billion.

If predictions run true, then it may imply that consumer confidence has dropped, causing less spending to occur, which will hinder the economic recovery.

On Thursday, GBP may also be influenced by the Bank of England’s (BoE) interest rate decision which is forecast to raise rates from 0.25% to 0.5%.

Both GBP and CAD will also remain susceptible to political and geopolitical movements.

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