GBP/CAD rates have spiked this week, providing those clients holding the Pound with some much needed respite. Sterling has gained almost 6 cents at the high, from its lowly positon below 1.70 at the start of the trading week. Sterling has benefited from some political stability, with Theresa May today being confirmed as the UK’s new Prime Minister. This has helped to alleviate some of the pressure on Sterling, which had been building since the Breixt result and David Cameron subsequently resigning his post as PM.
This market uncertainty has sapped investor confidence in the UK economy and a result the Pound lost a significant amount of value in a very short space of time. Now that once facet of this uncertainty has been removed it is no real surprise to see the Pound gain some traction but I am still wary of a sustainable recovery under current market conditions. Sterling remains extremely fragile and the recent gains could be eliminated as early as tomorrow, when we have the latest Bank of England (BoE) interest rate decision.
BoE governor Mark Carney has been quick to highlight the pitfalls facing the UK economy following the EU referendum decision and has alluded to the fact that we will need some sort of stimulus to navigate the uncertain times ahead. With a rate cut to 0.25% likely either tomorrow or next month and the chance of further Quantitative Easing (QE) being introduced, I expect the recent Sterling recovery to come under pressure should the scenario unfold as I expect.
If you have an upcoming GBP or CAD currency requirement, why not contact us directly. If would like to discuss the current market conditions and forecasts with a currency expert, or simply wish to compare our award winning exchange rates with your current provider, then I can be reached on 0044 1494 787 478 and just ask one of the team for Matt. Alternatively, I can be emailed directly on email@example.com