The global economy is in focus this week as the annual Davos world economic forum is taking place. The obvious key talking points will surround the US – China trade talks along with Brexit, which are two matters that could have a heavy impact on the GBP/CAD exchange rate.
Brexit latest news
Brexit related updates are coming through thick and fast as the time to arrange the process of the UK leaving the EU runs out. UK Prime Minister, Theresa May’s deal was voted against by Parliament last week by a considerable margin, and now the Government’s Plan B is the focus, along with the suggestions proposed by the Labour Party, lead by Jeremy Corbyn. May would like to try and gain more support from Conservative MPs and the DUP Party of Northern Ireland. In the meantime Labour has tabled an amendment aimed at triggering a debate on a ‘Peoples Vote’ even though the idea of a 2nd referendum has been ruled out a number of times by the PM, owing to concerns that it would impact social cohesion.
Slowdown in Chinese economic growth
The slowdown in Chinese GDP is likely to remain a talking point, and it could be the precursor to the global economy slowing which would likely impact the likes of CAD, which struggles in times of global uncertainty along with a number of other commodity based currencies.
The International Monetary Fund (IMF) downgraded its global growth forecasts yesterday, stating that this year growth will reach 3.5% and next year it will hit 3.6%.
Economic data is likely to take a backseat whilst Brexit is in focus, but its worth being aware that UK Wage Growth figures will be released today. Expectations are for a figure of 3.4% and if this is the case it will be the 5th consecutive month of growth for UK wages which could be positive for the Pound.
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