GBP/CAD looks undecided on Friday. Judging by larger time frames, the pair continues to move in a bullish channel since last Thursday. It’s could potentially target the highest level since May of this year.
Currently, one British pound buys 1.7056 Canadian dollars, down 0.03% as of 10:25 AM UTC, but the pair is bullish now as it tries to recover the morning losses. During the first part of the session, the Loonie was under pressure amid declining oil prices, but it bounced back on increased hopes that the US and China are close to inking a win-win “first phase” of a trade deal. On Thursday, oil prices tumbled on data showing a larger than anticipated increase in crude supply last week.
Yesterday, White House economic adviser Larry Kudlow told reporters that US President Donald Trump and his Chinese counterpart Xi Jinping were in final stages of signing the interim trade deal. He said:
“We are coming down to the short strokes. We are in communication with them every single day right now.”
Elsewhere, a Chinese official working in the country’s commerce ministry told media that the world’s two biggest economies are currently holding in-depth discussions as part of the potential trade deal, but rolling back tariffs was a key condition for reaching consensus. Last week, Trump scared the markets when he said that he would raise taxes on Chinese goods if no deal is reached.
China and the US have to reach consensus sooner than later. Otherwise, their ongoing conflict might have consequences worse than the two world wars. At least this is the opinion of former US secretary of state Henry Kissinger. Speaking at an event organized by the National Committee on US-China Relations in New York, the diplomat gave some gloomy predictions that could materialize if the two countries can’t settle their disputes. Kissinger commented:
“We are in a difficult period now. I am confident the leaders on both sides will realise the future of the world depends on the two sides working out solutions and managing the inevitable difficulties. There is no doubt many aspects of the evolution of China are challenging to the US. It never happened before that two major countries in different parts of the universe were in similar positions.”