GBPCAD rates have fallen and could easily fall below the 1.70 mark if we see fresh worse news for the pound and the Canadian dollar keeps performing well. The pound to Canadian dollar rate has already been below 1.70 this year falling in July and August touching 1.66. Expectations that Brexit might not be that bad have helped lift the pound but this is not looking so good now. Market focus is firmly back on the problems likely to be ahead with Brexit and with the consequences of what is increasingly seen likely to be a ‘hard’ Brexit.
Much attention will focus on the United States today and this evening as learn of whether or not the US will raise their interest rates once again, most analysts expect not but that we will see further guidance on rate hikes for the rest of the year. This should lead to some volatility on GBPCAD rates since the actions of the Federal Reserve impact attitudes to their closest neighbour Canada. Canada does a large portion of its trade with the US so what is happening in economic terms in the US and with the USD will usually be mirrored by the Canadian dollar.
Friday afternoon is Canadian Retail Sales and Inflation data. Both figures are set to show improvements, which would represent an economy that is growing which should help the currency strengthen. It has been a tough year for the Canadian currency and the Canadian economy following the Alberta Sands Fires in the Spring, this is estimated to have knocked up to half a percent off their GDP. Any signs the economy is back on track will lend support to the arguments that the Canadian dollar is set for further gains against sterling in the future.
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