It’s almost been a month since the ‘Brexit’ vote was first announced and GBP/CAD is still trading just off of it’s 52 week low of 1.7145, a lower level that was hit on the day of the announcement.
The Pound is under pressure for a number of reasons, most notably the step into the unknown as the UK was a member of the EU for almost 4 decades and markets across the board had hoped for a ‘Bremain’ vote. I think that moving forward we can expect to see the Pound fall below it’s 52 week low, and I expect that to happen before the end of the year as the negative affects of the ‘Brexit’ begin to affect the UK economy, and markets react badly to the news.
Canadian Dollar strength could also push the GBP/CAD pair downward as the Canadian Dollar continues to be in high demand. Negative bond yields are commonplace at the moment so investors searching for better returns are looking in places they not have considered previously, with Canada offering competitive returns. In the year to date buying for Canadian denominated assets is at a record pace and if this continues we can expect to see CAD rise due to such a high demand.
Oil has also been slowly recovering, boosting the commodity based currency, weighing further on the GBP/CAD pair.
Sterling sellers may wish to consider selling sooner as opposed to later as although the Pound is trading at low levels, there’s an argument for the currency to fall further so removing that risk from the conversion may end up being the better choice.
Those with a currency requirement involving GBP and CAD may wish to get in contact with me (Joe) on [email protected] in order to ensure you make a well informed decision on when to make that particular transfer, as well as benefiting from highly competitive exchange rates from one of the UK’s leading foreign currency brokerages. Just provide me with a basic outline of your currency requirement and I will be back in touch with you as soon as possible.