Brexit Bill Update
The very brief Brexit bill currently is being held by the House of Lords after being approved by the House of Commons. Theresa May purposefully made the bill as brief as possible so there would be little possible in terms of amendments. Her plan for a swift, hard Brexit seems to be going to plan as it looks as though there will be no significant changes to the bill by the House of Lords.
If amendments were to take place it could delay the triggering of Article 50. Any changes would have to be approved by the House of Commons and we could see ping-pong situation between the two. This would not sit well with leave voters and there could be public outcry. It would also not benefit Sterling as it would add more uncertainty to the Brexit process.
The bill has now passed the reading stage and the committee stage is due to start on 27th February. There will then be a consideration of amendments before being passed for royal approval.
The news that there is unlikely to be any changes to the bill has been a contributing factor in a Sterling rally against the Canadian Dollar. Another catalyst was recent positive GDP data.
Is OPEC’s deal falling apart?
Oil is one of Canada’s biggest exports and as such the change in oil price can cause swings in Canadian Dollar value. The organisation of petroleum exporting countries (OPEC) recently struck a deal that oil production would be cut by all member countries in order to decrease surplus and increase dwindling oil prices. However , Haider Al-Abadi, Iraqi Prime Minister has stated he is unhappy with the current price of oil per barrel and needs a rise of up to $7. This is despite the fact that Iraq is a contributor to the drop in price, failing to meet the cut in production put in place by OPEC.
If the deal is not taken seriously we could again see a mass excess in oil production and oil price would suffer as would the Canadian Dollar.
Canadian Retail Sales Data and Inflation
Retail sales data came in yesterday and came in below expectations which did see Sterling strengthen. Tomorrow keep an eye on CPI data, it is a measure of inflation and is a a key market mover.
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