GBP/CAD has been volatile on Tuesday, edging up 0.09% to 1.6800 as of 10.26 AM UTC. The price has recently rebounded after a sharp drop in the morning.
The pair has moved within a bearish channel since October 21, and it seemed that it would continue this mood amid a weakening British pound tired of Brexit confusion. However, the recent rebound helped the quotation broke the channel’s resistance line, and the door for a fresh uptrend is wide-open.
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UK PM Boris Johnson Fights for Early Election
Prime Minister wanted to hold a national election on December 12, hoping that his Conservative Party would gain more seats, thus allowing him to take the Brexit task in his hands. Under this scenario, Johnson could easily avoid the hurdles of a parliament that had mostly opposed his motions.
However, under the current law, the PM cannot initiate an election without the parliament’s nod. Yesterday, the House of Commons blocked Johnson’s election bid, with the main resistance coming from the opposition Labour Party. The latter asked the PM to explicitly rule out a no-deal Brexit.
The prime minister didn’t give up and called for an early election again today. Surprisingly, the Labour Party changed its mind a few minutes ago and hinted that it would support Johnson’s bid to hold a general election, at this time in January of next year.
The British pound surged on the news and has recovered all losses incurred in the morning.
Besides, the growth in UK housing prices slightly accelerated this month, according to mortgage lender Nationwide. House prices increased by 0.4% year-on-year in October, after several flat months, while economists expected a 0.2% growth that suggested no change from September’s eight-month low.
Bank of Canada Likely to Leave Rates Unchanged
Tomorrow, the Bank of Canada will meet to decide the interest rate and its first monetary policy since the federal election last week, which saw PM Justin Trudeau securing a narrow win.
Economists expect the central bank to maintain the rates unchanged. While the US Fed and the European Central Bank (ECB) went for easing measures, the Bank of Canada left the rates at the same levels, making the Canadian dollar more attractive for investors. However, a stronger CAD might make it more difficult to support the economic growth of an export-dependent country.
