GBP/CAD is carrying on with its uptrend on Wednesday, after breaking yesterday the resistance line of a bearish channel that formed on October 21. The pair is trading at 1.6849, up 0.09% as of 10:10 AM UTC.
The British pound looks stronger as UK Prime Minister Boris Johnson finally obtained the parliament’s approval for an election scheduled for December 12.
Elsewhere, the Bank of Canada (BoC) will meet today to decide the interest rate and report on the monetary policy.
Bank of Canada to Keep Rates Steady
The Canadian central bank is likely to leave the interest rate unchanged at the current level of 1.75%, which has stayed for about a year.
The Canadian dollar will react to the bank’s monetary policy updates and economic outlook as the markets will monitor governor Stephen Poloz’s stance on the domestic economy.
Economists from 10 out of 11 primary dealers for Government of Canada securities told the Wall Street Journal (WSJ) that they expect the central bank to maintain the benchmark overnight rate. However, 50% of the surveyed economists said that the BoC would be forced to cut the rates amid global trade tensions. Besides, the aggressive easing from the Fed and ECB puts too much pressure on the CAD.
On a side note, the Fed should also decide the interest rate later today.
UK to Hold Election in December
In the UK, PM Boris Johnson obtained the parliament’s nod to organize an early election in less than two months. Thus, it will be the first December election in about a century.
Two weeks ago, Johnson reached a deal with European leaders and the UK parliament finally approved it in a preliminary vote but chose not to rush. The EU responded by granting another extension to the previous deadline of October 31. Now the UK can withdraw from the bloc by January 31.
The PM hopes that the coming election will break the deadlock, but there are obvious risks.
Anand Menon, director of The UK in a Changing Europe, told media:
“This will probably be the most unpredictable election I have ever known. Is it Brexit or is it not? We don’t know. Second, the election is as volatile as ever and, thirdly, the potential for tactical voting – and tactical voting to go wrong – is very high given the Leave-Remain split.”