GBP/CAD is advancing on Wednesday, though the increase is sluggish. Currently, the pair is trading at 1.7230, up 0.13% as of 10:45 AM UTC.
While there are no significant fundamentals to back any trend at the moment, investors are discussing the easing fears of the coronavirus outbreak and the post-Brexit mood.
UK finance minister Sajid Javid said yesterday that Britain was looking for a stable relationship with the European bloc “for decades to come” in financial services. The country’s financial sector will lose access to European clients from January next year. British financial firms will be able to deal with those customers only in sub-sectors where the rules are regarded as equivalent.
Javid called European leaders to consider the UK’s financial sector “equivalent” as a whole, given that its regulation is as tight as the European one.
“This is important not only in the short term, but to establish the norms and ways of working with the EU that will endure for decades to come,” the finance minister said.
However, Brussels’ reaction was prompt and divergent. Michel Barnier, the European Commissioner tasked with Brexit, said that the UK should be “under no illusion” when it comes to financial services, as there would be “no general, global, permanent equivalence” between the two sides.
In a speech in the European Parliament in Strasbourg, Barnier made it clear that “there will be no common management.”
The equivalence only touches upon some financial activities, but basic banking is not included, and the EU can remove access with only 30 days of prior notice in some instances.
British financial firms have already opened offices in the EU in order to avoid losing access to the single market.
Despite the disagreements, the sterling continues to be supported by the sentiment that the two sides would reach a trade agreement by the end of this year and avoid a hard Brexit scenario.
The markets are also discussing the evolution of the coronavirus outbreak, which is now called COVID-19. The death toll is already exceeding 1,100, out of which over 1,000 died in Chinese province Hubei. The good news is that the infection rate seems to be slowing.
