The GBPCAD interbank exchange rate has been volatile of late, mainly due to the uncertainties surrounding Brexit. Recent revelations from the Brexit Party have given the GBPCAD exchange rate a lift as they announced they will not be contesting for Conservative seats in the upcoming election
Brexit party announces Leave alliance
With Nigel Farage, the leader of the Brexit Party announcing that the party will not battle for the 317 Conservative seats which were won in 2017, the Conservatives will be puffing a huge sigh of relief. This is because this will significantly reduce the chance of a hung parliament occurring in the December 12th general election.
How Did the Currency Market React to the Brexit Party Announcement?
The uncertainty surrounding the upcoming election has caused volatility in the trading market, particularly for GBP. But the recent news of the Brexit Party backing off from Tory seats has given a boost to the pound. This is because the Conservatives are viewed as more ‘market friendly’ than Labour – their closest rivals. The market boost has also echoed the opinion that it is more likely that a clear result will occur in the election, avoiding a hung parliament. The pound rose against the Canadian dollar this Monday, as the Office for National Statistics (ONS) announced that the UK had escaped the clutches of recession. However, experts are stating that this narrow escape is not something to celebrate and the GBP has been stop-start all year.
The CAD Struggles Due to Trade Tensions, Whilst GBP Looks to Wage Growth Figures
Last week, the CAD fell after the US-China trade rally began to look unpromising. With Trump stating that comments about him suggesting reducing trade tariffs with China were bogus, currencies around the world have felt the effects of the trade stall. Oil trade prices have slid due to the tensions in the trade talks leaving the CAD under pressure.
Today (Tuesday 12th) will see the UK’s employment and wage growth data being released. GBP investors are remaining hopeful that the data will prevail strong. But doubters suggest, should the unemployment rate rise higher than expected and wage growth show signs of slowing that this could mean a slump for pound sterling.
Investors in the CAD will look to today’s oil prices for hope. Should they decline for the second day in a row, there is a large chance that the sentiment behind the Canadian dollar will slump. This is likely to leave the GBPCAD exchange rate flat.
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