Pound Sterling forecast: Brexit talks the main driver for GBP rates
Perhaps the main driver of Sterling value at the moment are the ongoing talks between the Conservatives and Labour regarding the Brexit plan. With UK Prime Minister May’s Brexit deal being rejected within Westminster three times so far, she now needs to gain the support of her political opponents in order to be able to carry out the Brexit before the next deadline date on the 31st of October.
There have been calls from Conservative leaders to end the talks as they aren’t progressing, according to reports. However, the Pound hasn’t been sold off dramatically so far, perhaps due to the fact that the talks remain ongoing. One of the main issues remains the customs union, and there are also a number of Labour members that aren’t prepared to agree on a deal that doesn’t include another referendum, which is another issue within the talks.
Brexit holding back Sterling exchange rates
The ongoing issues surrounding the Brexit plan are clearly holding Sterling exchange rates back, as the economy is actually performing quite resiliently despite the headwinds caused by Brexit. Wage growth has been increasing and the unemployment rate is just 3.9%, which is a 44-year low. If there is a breakthrough within the cross-party talks I personally believe that we will see a boost to the Pound’s value, similarly if there is another referendum announced I would also expect to see Sterling climb.
Canadian Dollar exchange rates under pressure
The Canadian Dollar has been coming under pressure recently due to fears surrounding the global economy, as the talks to resolve the trade war between the US and China heat up.
Global stock markets as well as the currencies of economies that depend on global trade have weakened due to the escalation of trade war talks between the two economic powerhouses and CAD has paid the price, with the Canadian Dollar trading at its lowest levels against the US Dollar since the 3rd of January.
Economic data expected this week
Economic data out of the UK is light this week, but there will be a number of key releases out of Canada with Inflation data being released tomorrow at 1.30pm, and then a speech from the Bank of Canada’s Stephen Poloz on Thursday which could impact CAD exchange rates depending on the content of his speech.
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