The rally in the pound has continued to find traction particularly against a weaker Canadian dollar. GBPCAD is much improved as there is a prospect of the Bank of Canada cutting interest rates. I personally do feel the Loonie could come under much further pressure but that this will be much longer term. If you have a pending GBPCAD requirement understanding the market and all of your options in advance could save you money.
The big question is over the UK’s Supreme Court case which is due on the 24th January at 09.30 am, most analysts expect this could be GBP strength but at the moment anything could happen. The big risk is that the pound slips now as many expect GBP strength. Therefore on the news next week sterling could rise say 1% but it could slip up to 3%, the surprise would be the fall.
If you are buying Canadian dollars the best time really depends on what your timescales are. If you have a longer term requirement then it could be worth hanging fire to see how a number of events pan out. Notably the outcome of the likelihood the Bank of Canada cut interest rates and also the possibility of a collapse in the price of Oil if the OPEC (Organisation of Petroleum Exporting Countries) deal collapses.
Other events to make note of are the impact of Trump on the Canadian economy, whilst the Trump effect could actually help the Canadian economy as the US economy roars ahead the prospect of Trump turning business inward to the US might harm some of the US’s trading partners.
All in all the next few weeks and month are likely to remain volatile, there could be a very good spike on offer in the next week for CAD buyers but this could fall before rising again much later in the year. If you have any problems or questions please contact me Jonathan Watson directly by emailing [email protected]