GBP/CAD Continues Rally as UK Officially Leaves EU

GBP/CAD continues the bullish rally on Friday, after surging 0.58% yesterday. Currently, one British pound buys 1.7349 Canadian dollars, up 0.31% as of 10:05 AM UTC. While the pair has just updated the year-to-date peak, it is still far from the December high reached during the UK election won by Prime Minister Boris Johnson.

The sterling started to increase on Thursday after the Bank of England (BoE) said that its policymakers voted to maintain the interest rate unchanged at 0.75%. In fact, to be more accurate, the quotation started to surge about one minute before the BoE’s announcement, which led investors to suspect that some market participants knew in advance about the voting results. The Financial Conduct Authority (FCA) will investigate the situation.

The pound continues to be bullish during the Brexit day. Today, the UK is officially leaving the European bloc after three long years dominated by uncertainty. This is by far the most important geopolitical move carried out by Britain since World War Two.

Johnson proudly said that “this is the dawn of a new era,” but those on the European side are not happy with the departure. The bloc will lose 15% of its economy and the financial center of the world after the US.

The British currency is also supported by a series of economic updates that point to an increasing optimism. Recently, the BoE said that mortgage approvals touched the highest level in about two and a half years last month.

The number of mortgages approvals increased to 67,241 in December, from 65,514 in November. Analysts polled by Reuters expected a reading at 65,700. The value of mortgage lending rose 4.55 billion pounds, beating economists’ expectations of 4.1 billion pounds.

Earlier today, market research firm GfK said that confidence among UK consumers this month rose to the highest level since September last year. The consumer confidence index increased to -9 in January, from -11 in December, in line with analysts’ forecasts.

Joe Staton, client strategy director at GfK, commented:

“The latest measures concerning our personal financial situation are encouragingly healthy and positive, as is the improvement in our view of the wider economic picture for the UK.”

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