GBP/CAD: Pound Cannot Handle the Pressure on Election Day

GBP/CAD is declining on Thursday — the day when the British citizens are voting who’ll reach the UK’s House of Commons. The pair is currently trading at 1.7344, down 0.18% as of 10:44 AM UTC. The quotation is likely to become much more volatile in the evening when the first polls and official results are available.

The stakes of this election — the first December poll in a century — are very high. Britons will choose between the now ruling Conservative Party, whose leader Prime Minister Boris Johnson wants to “get Brexit done” as soon as possible, and the opposition Labour Party, whose leader Jeremy Corbyn wants another referendum that could potentially reverse the Brexit process. Other parties will likely over 20% on aggregate only.

Recent polls showed that Johnson’s lead over the Labour party narrowed in the last weeks. Earlier today, an Ipsos MORI poll prepared for the Evening Standard newspaper suggested that the Tories held an 11-point lead over the Labours, down from 12 points last week.

The survey showed support for Conservatives at 44%, the same level reported in a previous poll published on December 6. Elsewhere, the Labour Party rose one point to 33%.

Besides the election pressure, the sterling has slightly declined after the Royal Institution of Chartered Surveyors (RICS) said that UK house prices tumbled in November by the most since April of this year, citing Brexit uncertainty as the main cause.

The monthly house price indicator fell to -12 in November, from -5 in October. The number of new buyers and sellers is still falling. Nevertheless, the decline in sales might be bottoming out as the number of surveyors who anticipate a rebound next year rose to the highest level in two years.

RICS chief economist Simon Rubinsohn commented:

“Whatever happens in the general election today, it is important that the new government provides reassurance both over the stewardship of the economy and the ongoing challenges around Brexit.”

The Canadian dollar is now monitoring the news related to the US-China trade relationship. The US is set to impose new tariffs this Sunday, though Trump might delay that plan.


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