Carney Warns of Continued Sterling Volatility | Loonie Slides on US Housing Data
Published November 20, 2018
The loonie posted minor losses against the greenback this morning; USDCAD is trading at 1.3208. The US economic focus today centers on construction figures. Building Permits are expected to improve to 1.26 million and Housing Permits are also forecast to rise to 1.23 million.
Bank of England Governor Mark Carney stated that the pound’s volatility will remain as long as uncertainty continues over the United Kingdom’s exit from the European Union. In his address to parliament, he reiterated that a disorderly Brexit would see Britain suffer a major supply shock.
The EU’s member states have emphasized discontent with the Brexit agreement that has been offered by the UK government. Brexit pressures will continue to swell, with the deal likely to be signed by the end of the week. However, market uncertainty still looms as the UK’s chief trade negotiator privately expressed frustrations with the Brexit withdrawal deal.
The US Federal Reserve remains on the path towards gradually raising rates in 2019, but the pace could be slower than predicted. The US-China trade war is expected to stifle US growth, and negate the stimulus provided from US tax cuts. If undesirable GDP forecasts continue to emerge, the Fed could decide to raise rates more slowly next year.