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GBP/CAD Closes Higher after Week of Brexit Drama

Last week’s high: $1.7748

Last week’s low: $1.7387

 

Canadian Dollar Suffers against Resurgent Pound

The Pound Canadian Dollar exchange rate was volatile last week due to a series of important votes on Brexit. This concluded with a request for a delay to the Brexit process, and a third vote on Prime Minister Theresa May’s deal on the 20 March.

The first half of the session saw the Pound benefit after Theresa May confirmed that the ‘meaningful vote’ would go ahead on Tuesday, dispelling concerns that the vote would be delayed yet again.

Attorney General Geoffrey Cox, however, noted that the deal failed to secure any notable ‘legally binding’ changes to the Irish backstop, which then weakened the likelihood of May’s deal passing through Parliament, and as a result the Pound fell on Tuesday.

May’s deal was voted down on Tuesday evening, which saw the Pound begin to struggle on Wednesday, although GBP shot up temporarily to a 21-month high until its lack of a legally-binding status began to haunt markets.

Thursday saw the vote on an extension to Article 50 win by an overwhelming majority of 413 to 202.

The GBP/CAD exchange rate closed with the Pound up against the Canadian Dollar, as Theresa May once again rallied for support for a third attempt at a ‘meaningful vote’. Many Sterling traders also awaited news from the EU on an official delay to Brexit.

 

CAD Outlook: Brexit to Remain in Driving Seat for GBP/CAD this Week

Brexit will remain in focus this week ahead of Wednesday’s key vote on May’s Brexit deal. However, some traders will also be looking ahead to Thursday which will see the Bank of England announce its latest interest rate decision.

If May’s deal is accepted on Wednesday this could see the Pound soar, however, if it is rejected this would further exacerbate Brexit uncertainty as a no-deal would become increasingly likely, potentially sinking the Pound.

Canadian Dollar investors, meanwhile, will be looking ahead to Friday next week which will see the publication of the Canadian retail sales figures for January, and with any signs of an increase this could see the ‘Loonie’ rise.

 

Key Events

19 March

09:30 UK Average Earnings Excluding Bonus (Jan)

09:30 UK ILO Unemployment Rate (Jan)

20 March

09:30 UK Retail Sales (Feb)

09:30 UK Consumer Price Index (Feb)

N/A UK Parliamentary Vote on Brexit

21 March

9:30 UK Retail Sales (Feb)

12:00 Bank of England Interest Rate Decision

22 March

09:30 UK Public Sector Net Borrowing (Feb)

12:30 Canadian Retail Sales (Jan)

12:30 Canadian Bank of Canada CPI (Feb)

 

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To keep up to date with the Canadian Dollar, visit the CAD blog in our Currency News section.

 

Alastair Archbold

Foreign Exchange Manager

aja@fcgworld.co.uk

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