GBP/CAD has been trading sideways since Monday and continues to look undecided today. Currently, the quotation is displaying 1.7069, up 0.04% as of 9:55 AM UTC.
Traders are closely watching the Brexit developments and the tensions in the Middle East, where Iran launched missiles on US military facilities in Iraq.
The sterling has received mixed signals from UK economic data, including productivity and housing prices.
Productivity in the UK improved only slightly in the three months through September 2019, the Office for National Statistics (ONS) said recently. After four quarters of contractions, production per hour worked increased by 0.1% in the third quarter year-on-year.
The indicator is quite relevant because growth in productivity is essential to the long-term stability of an economy. Katherine Kent of ONS said:
“Although productivity grew on the year, the underlying picture is of sustained weakness since 2008, with growth over the past year being only a third of the average over the last 10 years or so.”
UK Prime Minister Boris Johnson, who won a surprising victory in the election last month, along with finance minister Sajid Javid is planning a boost in infrastructure investment to help the country’s weak productivity.
Javid stressed that low productivity had restrained the economy for too long.
Tej Parikh, chief economist at the Institute of Directors, stated:
“The government’s spending ambitions for our broadband and transport networks offer some hope for uplift down the line. But long-term capital investments must not displace efforts to jump-start improvements to our business environment today.”
Elsewhere, mortgage lender Halifax said that British house prices jumped last month by the most in about 13 years. Nevertheless, the market is expected a slow recovery. House prices increased by 1.7% in December compared to the previous month. Year-on-year, house prices rose 4.0%, the biggest increase since February 2008.
Last week, mortgage lender Nationwide reported that its indicator of house prices rose last month by more than 1% year-on-year for the first time in over 12 months.
GBP/CAD might become more volatile as Johnson is expected to meet European Commission President Ursula von der Leyen later today.
