GBP/CAD is declining on Friday, ending the week in the negative territory. Currently, the pair is trading at 1.6987, down 0.43% as of 9:22 AM UTC. The quotation has just updated the lowest level since mid-November.
The Loonie is supported by surging oil prices. Both WTI and Brent crude brands have gained about 3% amid fresh tensions in the Middle East. Earlier today, the US launched an airstrike in Iraq, killing a senior Iranian military commander.
The downtrend became steeper after IHS Markit released construction purchasing managers’ index (PMI) for the UK. The indicator declined more than expected, with civil engineering activity showing the sharpest decline since 2009.
The UK construction PMI fell to 44.4 last month from 45.3 in November, while analysts expected an increase to 45.9.
The survey was carried out between December 5 and 20. On December 12, the UK held the national election in which Prime Minister Boris Johnson won a large majority.
Tim Moore of IHS Markit commented:
“Brexit uncertainty and spending delays ahead of the general election were once again the most commonly cited factors highlighted by firms experiencing a drop in construction activity.”
Nevertheless, some components suggested better figures, especially those looking forward. For example, business expectations rose to a nine-month high. Moore explained:
“Survey respondents cited confidence that a more predictable domestic political landscape and clarity on Brexit could deliver a much-needed boost to clients’ willingness to spend in 2020.”
The pound couldn’t be saved by positive housing market data. Earlier today, mortgage lender Nationwide said that house prices had increased at an annual rate of 1.4% last month, in line with analysts’ forecasts. Interestingly, the indicator didn’t exceed the 1% mark in the previous 12 months.
In monthly terms, house prices rose 0.1% in December, while economists expected no change. Nationwide analysts expect house prices to remain unchanged over the next year. Chief economist Robert Gardner commented:
“Looking ahead, economic developments will remain the key driver of housing market trends and house prices. Much will continue to depend on how quickly uncertainty about the UK’s future trading relationships lifts as well as the outlook for global growth.”
Separately, the Bank of England just published better-than-expected mortgage lending and mortgage approvals figures.
