GBP/CAD is moving sideways on Wednesday. Currently, the pair is trading at 1.7141, up 0.02% as of 10:10 AM UTC. Yesterday, the price declined by almost 0.50%.
The pound has become more balanced after the Nationwide Building Society said that UK house prices have increased this month at the fastest annual rate since November 2018. The positive result is adding to the general confidence, prompting investors to cool their expectations of an interest rate cut from the Bank of England (BoE).
The annual growth in house prices accelerated in January to 1.9% from 1.4% in December, beating economists’ expectations.
In monthly terms, house prices rose 0.5% in January, from 0.1% in December. Analysts anticipated an increase of 0.3%.
Robert Gardner, chief economist at Nationwide, said that healthy labor market conditions and low borrowing costs had a positive effect, offsetting the impact of the uncertain economic forecast.
Elsewhere, the Loonie is supported by recovering oil prices, with both WTI and Brent measures increasing on Wednesday after the American Petroleum Institute (API) said that stockpiles of US oil had decreased significantly last week.
Oil prices have dropped in the last few days on fears that the outbreak of a coronavirus in China could hurt the economy and affect global trade.
In the UK, markets are closely watching the Brexit development, with Britain being set to leave the European Union (EU) on Friday. However, the most challenging part only begins, as the two sides have to reach a complex trade deal within 11 months. Last month, UK Prime Minister Boris Johnson ruled out a potential extension of the transition period beyond December 2020.
Earlier today, German Foreign Minister Heiko Maas said that the UK would have to compromise on issues like environmental protection and consumer rights if it wants to maintain access to the EU’s single market. He told media:
“By the end of the year, we need to be clear on the shape of our relationship. So let me say very openly: Yes, we all want zero tariffs and zero trade barriers, but that also means zero dumping and zero unfair competition. Without similar standards to protect our workers, our consumers and the environment, there can be no full access to the largest single market in the world.”
Previously, other European leaders voiced similar opinions.
