GBP/CAD Under Pressure Amid US-China Trade Optimism

After a strong start of the week, GBP/CAD is declining on Tuesday, as the Loonie benefits from investors’ increased optimism over the US-China trade deal.

The pair is currently trading at 1.7121, down 0.13% as of 10:40 AM UTC.

Earlier today, China’s Commerce Ministry said that top negotiators from both countries held another phone call on Tuesday morning. The statement reads:

“Both sides discussed resolving core issues of common concern, reached consensus on how to resolve related problems (and) agreed to stay in contact over remaining issues for a phase one agreement.”

The trade-reliant Canadian economy is welcoming any positive news about the potential US-China trade deal.

The participants of the call were US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin from the Washington side. China’s Vice Premier Liu He from the Beijing side. Besides, Chinese Commerce Minister Zhong Shan, PBOC Governor Yi Gang and Ning Jizhe, vice chairman of China’s National Development and Reform Commission, also joined the call.

Investors have been watching the evolution of the Sino-US trade relationship very closely, hoping for a “phase one” deal to be signed by the end of this year. However, it seems that the deal will be delayed until early next year, as the world’s two biggest economies cannot agree on several key issues.

To make things worse, the US Congress recently approved a bill to support pro-democracy protesters in Hong Kong. China claims that Washington is interfering in its internal affairs.

UK Mortgage Approvals Tumble

The sterling is under pressure also because mortgage approvals by UK banks declined last month to the lowest level in seven months. This adds to the already strong signs of a weakening housing market ahead of Brexit. The British citizens are expected to give their vote in a general election scheduled for December 12.

UK Finance said a few hours ago that banks approved 41,219 mortgages last month, down from 42,216 in September.

Nevertheless, the value of secured lending rose 3.452 billion pounds, from 2.457 billion pounds in September, which is the largest increase since March 2016.

Also, consumer lending rose last month by 4.5% year on year, up from 4.4% in September.

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