GBP/CAD rates: Will today’s Cabinet meeting result in a clearer path to Brexit?

Will today's cabinet meeting result in a clearer path to Brexit?

Last night’s round of indicative votes once again failed to result in a clear majority favouring a particular option for the UK’s departure from the EU. There have now been 3 failed attempts at a meaningful vote and 12 failed indicative votes which has resulted in a Brexit deadlock at the time of the expected departure date which passed last Friday.

Last night there were 4 different Brexit options voted on. The results were closer than the last set of indicative votes but still failing to result in a favourite. It was the option of remaining in the customs union that came the closest after the option lost by just 4 votes so it will be interesting to see if this approach is pursued.

From a currency perspective the pound remains strong compared to where its been trading for the past couple of years as financial markets appear to still believe that a Brexit deal will be pushed through and remains the likely outcome.

This morning UK Prime Minister Theresa May will hold a cabinet meeting which is expected to last around 5-hours and intends to decide the governments strategy. Market commentators have suggested that a push for another ‘meaningful vote’ on her deal will be on the agenda. There are now 10-days until the current extension plan will elapse so there could be market movement between now and then depending on how today’s schedule goes along with discussions in Parliament on Wednesday.

Canadian GDP higher than expected

The Canadian dollar was in high demand towards the end of last week after it was announced that Canadian GDP rebounded in January by a greater extent than expected. This tied in with a slight sell-off of the pound as Brexit frustrations continue, resulting in a loss of 2-cents for GBP/CAD. Sterling has started the week well as hopes of a Brexit deal remains but I think we could see GBP/CAD come under renewed pressure if the deadlock continues throughout this week.

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