The GBP/CAD exchange rate rose yesterday morning, with the pairing trading at around CA$1.7277. The Sterling has crept higher on Tuesday as the UK construction PMI revealed the sector saw the slowest decline in construction output since July.
Construction PMIs Boost GBP Slightly but Uncertainty Remains
The PMIs for the UK construction sector edged up slightly to 45.3 in November to Octobers previous 44.2. However, the sector saw a sharp decline in new work. On top of this, companies continue to remain cautious about the future of the sector with the degree of business optimism running below the average for the long-run. Experts have commented on the data stating that a combination of Brexit uncertainty, the upcoming General Election and wet weather all faceted into weighing down the construction sector last month with purchasing, out and new orders falling once more.
Slip for CAD Ahead of OPEC+ Meeting
CAD fell against the GBP yesterday despite the slight rise in oil prices as hopes increased that OPEC and its associates would agree to further cuts during the meeting on Thursday. OPEC ministers will meet in Thursday’s meeting with a further meeting Friday to include the wider OPEC+ group. Whilst prices did rise, the gains experienced were limited and experts suggested that the little change in price hints that traders are sceptical about the additional bpd cut on top of the extension of the current production cut agreement.
The oil market also had further pressure weighed upon it from the US-China tensions following recent happenings from both parties. However, Trumps senior adviser mentioned that a deal was still possible before the end of this year.
Conservatives Widen Their Poll Lead over Labour
The GBP has risen following an upswing in support for the Tories in election polls on Tuesday. In the most recent poll, Boris Johnson’s Conservative party increased its lead over the Labour party by 12 points. The increase in support for the Tories will go in the favour of GBP as a clearer Brexit is more likely with a Tory majority government in December. With the election next week, any leads for the Conservatives are likely to boost GBP.
GBP/CAD outlook could be buoyed by a hawkish BoC this Wednesday. The UK services PMIs are also set to be released later today which could spell trouble for the GBP if the sector has contracted. Whilst the BoC’s decision on interest rate cuts will be a big driver for the path CAD and the Canadian economy takes into the future. Attention will be turned to these two events over the next 24 hours.
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