GBP/CAD slightly advances on Wednesday, the day before the British citizens will vote a new parliament. However, the gain is very modest, and we might see the pair turning red by the end of the session, especially after YouGov and other pollsters showed that Prime Minister Boris Johnson’s Conservative Party had lost its lead over the last weeks.
Currently, one British pound buys 1.7401 Canadian dollars, up 0.03% as of 10:35 AM UTC. The pair tumbled yesterday after the polls were published, touching a daily low at 1.7343.
The YouGov survey published by The Times showed that Johnson was set to win a majority of only 28 seats in the UK Parliament tomorrow, down from 68 seats predicted two weeks ago. The pollster concluded that the UK might have a hung parliament in which no party holds a majority. According to many analysts, that could be the worst-case scenario that would negatively affect the British economy at least in the short-term.
The pound has rallied in the last few weeks on increased optimism that the Tories would secure an outright majority in the House of Commons, helping them handle the Brexit deal agreed with the European leaders. In contrast, the latest polls disappointed many investors, who’re now worrying about the UK economy. Nevertheless, YouGov said that there was room for the Tories to secure a majority.
Anthony Wells, YouGov’s director of political research, explained:
“We absolutely cannot rule out the 2019 election producing a hung parliament – nor can we rule out a larger Conservative majority.”
The YouGov poll is relevant because it was the only pollster to accurately predict the results of the previous UK election two years ago.
Asked about the opinion polls, Johnson said earlier today:
“It could not be tighter. I’m just saying to everybody the risk is very real that we could tomorrow be going into another hung parliament, that’s more drift, more dither, more delay, more paralysis for this country.”
Nevertheless, despite the pressure, the sterling manages to stay steady against the Canadian dollar amid declining oil prices. The oil-depending CAD fell against majors after a surprising increase in US crude inventory.