The pound has slipped against the Canadian dollar today after what has been a very good run in recent weeks having taken levels close to 1.69 for the pair and the highest so far this year.
After 9 months of immense uncertainty with Brexit the UK Prime Minister Theresa May will invoke Article 50 tomorrow. My view is that the pound may see a small rally against the Canadian dollar although the markets should have really priced in this eventuality by now, some 9 months on since the initial vote to leave.
Article 50 will be invoked tomorrow in a hand delivered letter by UK Ambassador Sim Tim Barrow to President of the European Council Donald Tusk at 12:30. There is likely to be considerable interest in this development and the whole world is likely to be watching. There is likely to be a considerable amount of uncertainty that goes with this and those clients looking to buy or sell Canadian dollars for pounds could see some excellent opportunities following a big market reaction. My view is that the pound may see a boost against the Canadian dollar although gains are likely to be short lived as negotiations will take two years to complete if not longer.
The Canadian dollar has strengthened today on the back of a speech that Bank of Canada Governor Stephen Poloz made earlier emphasising free trade as hugely important for the Canadian economy whilst also hinting at keeping a trade deal in place with the US under NAFTA. However, data is light this week in Canada with some industrial product and raw material prices released on Thursday.
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