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GBP/CAD is slightly bullish on Friday, as the Loonie continues to be under pressure on US-China trade pessimism. The pair will likely choose a direction after Canada releases its GDP data in a few hours from now.
Currently, one British pound buys 1.7147 Canadian dollars, up 0.03% as of 11:05 AM UTC.
The trade tensions between the US and China re-escalated after US President Donald Trump signed a bill that supports pro-democracy protesters in Hong Kong. The situation doesn’t bode well for the Canadian dollar, as Canada is a trade-dependent economy.
Canada’s economic growth is expected to have slowed in the third quarter.
Brad Schruder, director of corporate sales and structuring at BMO Capital Markets, commented:
“If the number were to come in lower than expectations, then I think what you would find is Canadian dollar bears will instantly expect more dovish comments from the Bank of Canada next week.”
Bank of Canada (BoC) might give up its hawkish stance amid increased pressure from the US and European counterparts. They are implementing aggressive easing measures. BoC will meet at the beginning of December to decide its interest rate. While an overwhelming majority of economists expect the central bank to leave the rates at the current levels, the markets will watch the bank’s updated outlook.
The sterling is driven by economic data showing that British consumers increased their pace of borrowing last month. BoE reported that the growth rate in unsecured consumer lending rose to 6.1% in the 12 months to October. This was from 5.9% the previous month. This was the first increase since June last year.
BoE said that consumer lending rose by 1.326 billion pounds last month. Although analysts expected on average a rise of 0.9 billion pounds.
However, households spent less on mortgages. BoE said that the number of approved mortgages declined to 64,602 in October. This is the lowest level since March of this year.
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