The Canadian Dollar dipped against its US counterpart on Tuesday as the USD rose. Towards the end of trading, CAD did manage to stick within its recent trading range ahead of the expected signing of the phase one deal between the United States and China later this week. Meanwhile, GBP saw further losses after three members of the Monetary Policy Committee of the Bank of England nodded towards a potential rate cut at months-end. This saw GBP drop as investors worry about the impact of a rate cut to the British currency in a time of Brexit negotiations.
Canadian Dollar Slumps Against USD as Trade Deal Awaits to Be Signed
The Canadian Dollar was trading 0.1% lower at 1.3071 to USD yesterday during early trading as reports of the trade deal between the US and China is sat waiting to be signed. Investors in CAD will be hoping that the US-China trade deal will be signed later today as reports of a Chinese delegation that arrived into Washington yesterday surfaced. Should the deal be signed, the Canadian Dollar and economy would likely benefit as the overall global trade outlook would also be on the rise. As a major producer of commodities including oil, Canada will benefit from increased global trade.
GBP Declines as Bets Rise for BoE Rate Cut on Month End
Meanwhile, GBP has declined after three members from the Bank of England’s Monetary Policy Committee have now admitted that they would vote in favour of an interest rate cut should the UK’s economic figures continue to return poor or sluggish figures. This came after recent dovish comments from Bank of England’s Governor Mark Carney suggested that the BoE is open to the idea of a cut should the economy require one. These unfolding’s led to the decline in GBP witnessed over the course of the week. The decline has led strategists to urge investors to buy GBP whilst it is at its weaker levels as GBP is likely to regain strength and brush itself off, meaning the weakness in GBP is likely to be short-lived. Attention will remain focused on the BoE as politics takes a backseat after December’s Conservative election win. Brexit negotiations will still be taking place and should any significant news unfold, it will likely affect GBP.
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