GBP/CAD Updates 7-Month Peak Ahead of UK Election

GBP/CAD continues to rally on Monday, as the pound is driven by hopes that the ruling Conservative Party will secure a comfortable win in Britain’s national election due on Thursday.

The pair is currently trading at 1.7460, up 0.28% as of 10:30 AM UTC. Earlier today, the price peaked at 1.7473, which is the highest level since mid-May. The quotation has been moving in an uptrend since November 27,

Last Friday, the sterling gained almost half a percentage point after Statistics Canada reported that the economy saw a decline by 71,200 jobs last month, while analysts expected a gain of 10,000 jobs for the month. Thus, the total number of jobs added year-to-date is about 285,100. The unemployment rate increased in November by 0.4% to 5.9%, which is the biggest leap since 2009.

Julia Pollak, labor economist at online employment service ZipRecruiter, explained:

“Canada’s jobs report is disappointing, showing job losses for the second month in a row. But observers should remember that the numbers are highly volatile and that this is still the strongest year for job growth in Canada in 17 years.”

Nevertheless, the recent signs of weakening labor market raised bets that the Bank of Canada might consider a rate cut next year. The Loonie has declined against all majors, including the British pound.

While Stochastic shows that GBP/CAD pair is in the overbought area, moving averages suggest there is still more room for the bullish rally.

The sterling is supported by increased optimism over Brexit. A recent poll by Survation, prepared for ITV’s Good Morning Britain, showed that Prime Minister Boris Johnson’s Conservative Party widened its lead over the opposition Labour Party to 14 percentage points compared to 9 percentage points last week.

According to the survey, the Tories were at 45%, up 2%, while Labours were at 31%, down 2%. The phone poll involved 1,012 people and was conducted between Thursday and Saturday.

Other polls published over the last two days showed the Tories ahead of Labour Party by between 8 and 15 percentage points.

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