With the general election around the corner, GBP has faced twists and turns along the way. Reports on the charts suggest solid support for GBP but the upcoming election is proving to be a menace for strength as polls show a Tory popularity decrease across the UK. For CAD, the Bank of Canada (BoC) has decisions to make over their rate cuts which have weighed heavy on the currency as investors lose faith over the strength of the economy in Canada.
GBP Has the Charts on Its Side but Election Will Be the Deciding Factor
For GBP, the single biggest factor in affecting its standing in the market is the general election which is less than two weeks away. A clear Tory majority will likely see Brexit seen through with little stalling. This is what the markets are banking on as it will provide a clearer outlook for the UK economy. However, recent polls have suggested that a previous Tory majority has begun to slide, with opposition party Labour hot on their heels. This has seen GBP slide as confidence in a Tory majority is starting to become shaky.
CAD Fails to Find Inspiration Last Week, with Boc Rate Decision to Be Decided This Wednesday
Cad did not perform in last weeks trading sessions, since then the ‘Loonie’ has remained on the back foot and is likely to start the week in this defensive set-up also. Wednesday will see the Bank of Canada’s interest rate decision at 15:00. This is arguably the headline of the week for CAD and although most are tipping the rate to remain unchanged, the decision is likely to weigh on Cad both before and after release. Friday will see the release of the figures for November’s labour market data at 13:30. This is less likely to affect CAD’s standing than the BoC decision but will still be on investors radars.
What to Watch out for in the Upcoming Week for GBP and Cad Exchange Rates
GBP will be heavily dictated by polls and party performances up until the election date. For CAD, the Wednesday decision on interest rate cuts is going to be the heavy hitter for CAD this week. The GBP will be hoping for any indicators of Conservative popularity to fuel the fire of GBP and an easier Brexit solution. Whilst CAD will be less concerned about the US economic slowing and more so with what direction the Bank of Canada looks to take the Canadian Economy in the upcoming months as we enter 2020.
If you would like to learn more about what may affect the GBP/CAD or have an upcoming currency transfer, feel free to contact me, Tom Holian, using the form below.