It’s been an extremely volatile few days for GBP/CAD exchange rates, with the pair falling towards 1.63 on Monday.
The Pound staged a fightback yesterday, following confirmation that the UK Prime Minister Theresa May now has the authority to trigger Article 50 at any time. This helped boost Sterling’s value, with the pair now trading around 1.6450.
However, there is still uncertainty over when the bill will actually be invoked and as such I feel the current strength is likely to be unstainable in the short-term. Reports over the past 48 hours indicate Scotland will call a second independence referendum and this is sure to put pressure back on the Pound, even though early polls indicate a second No vote would be the more likely outcome.
What is may entail though is a potential delay the triggering of Article 50 until later this month and this uncertainty could easily sap investor confidence once again and the CAD could benefit as a result.
This week’s movement on GBP/CAD rates proves how fragile the UK economy remains in the minds of investors and with the Pound struggling to make a sustained move through 1.65, I would be tempted to take advantage of current levels ahead of what is sure to be an extremely unpredictable few weeks.
The markets are seemingly becoming increasingly concerned about Brexit and I cannot foresee a sustained run for Sterling through this period.
Looking at the Canadian economy and much will depend on the fluctuations in oil prices, their biggest global export. Commodity based currencies such as the CAD are always at risk in times of global uncertainty. They are reliant on global growth and if investors risk appetite falls and/or oil prices drop again then the CAD will likely suffer as a result.
If you have an upcoming GBP or CAD currency transfer to make, then we can help you navigate this turbulent market by keeping clients up to speed with all the latest developments regarding Brexit and beyond.
If you would like us to monitor the market for you ahead of a currency exchange, or simply wish to compare our award winning exchange rates with your current provider, then please feel free to contact me directly on 0044 1494 787 478 and ask one of the team for Matt.
Alternatively, I can be emailed directly on [email protected].