When Do I Trade GBP/CAD? (Matthew Vassallo)

Pound to Canadian Dollar Drifts Lower as Global Sentiment Improves

GBP/CAD rates have dropped over the past week, with a run of inconsistent UK economic data handicapping any further Sterling advances. The pair are now trading near 1.72 on the exchange and as I eluded to in my previous posts, the Sterling strength seen earlier this month proved not to be sustainable. As such, any clients who did not protect their positions will now be questioning whether we will see a recovery over the coming weeks.

Whilst it is very difficult to predict exactly how the market will evolve, it has become clear that investor confidence in the UK economy and ultimately the Pound is extremely low. Sterling positions remain fragile and as such I would not be prepared to gamble on an improvement, when there is no tangible evidence to support it. The silver lining for those clients looking to buy CAD with GBP is that the Pound did find a foothold at the beginning of the month and this was not anticipated or predicted. In fact, based on previous forecasts GBP/CAD could be trading at least five cents lower than it currently sits.

With so much uncertainty hanging over the UK economy it’s no real surprise to see the Pound struggling. We keep hearing different opinions of when Article 50 will be triggered, which will ultimately trigger our Brexit, and these range from February 2017 to the end of 2018 or even beyond. This is what is causing investors to sell off their GBP positions and as such the Pound’s value is decreasing. Until this market uncertainty is removed I feel there will be a cap on how far Sterling can rise and whilst it’s difficult to pin point an exact benchmark this could be as low as 1.80/1.85. Whilst these levels seem very attractive in the current climate are you prepare to gamble on a potential 10 to 20 cent loss in order to gain five? These are the questions investors and clients need to ask themselves because whilst market conditions can change quickly and aggressively, there is no easy way to gauge how long the current trend will last.

If you want to be kept up to date on the markets and you would also like to ensure that you are getting the very top levels of exchange for an imminent currency transfer or even a longer term one, then I can help you with this.

Not only do we give clients up to date market information but we all work for one of the largest and longest serving currency brokerages in the UK, so even if you have dealt with your current broker or bank for a long time I would be surprised if I could not show you a saving over what they are offering you – You can email me Matthew Vassallo directly on [email protected] and I will be more than happy to contact you personally to discuss the various options we have available to you.