GBP/CAD rates have fallen over the past 24 hours, with the pair now trading below 1.66 again. This move came following a positive run for Sterling, which had made a move towards 1.68 before retracting.
The markets focus has been on the UK Brexit for some time and today, finally, the UK will officially trigger Article 50 of the Lisbon treaty, which will officially start the UK’s separation for the EU.
Personally, I feel that most of the negative connotations surrounding this have been factored into the current levels on GBP/CAD. We may see an initial dip as the markets digest today’s events but I do not think it will be overly aggressive. However, there is still a risk as the unique position the UK finds itself in means that investors and clients need to be prepared for every eventuality.
It was poignant in my opinion that the Pound gained value against the CAD last week, when Theresa May announced our official Brexit date but a sustained recovery for Sterling is still unlikely in the short-term. There are still so many unanswered questions, for example what deal will be in place for the UK as we negotiate our exit, what potential fines need to be paid and what vision the government has for the long-term future of the UK economy?
This means clients should be looking for short-term market opportunities over the coming weeks.
Looking at the CAD, which has made significant inroads against Sterling over the past six months and whilst the Pound has gained something of a foothold recently, the current levels still offer extremely attractive selling opportunities when you consider the history of the pair.
The current market remains unpredictable at best and with global investor confidence fragile, commodity based currencies such as the CAD are always at risk. They are reliant on global growth, in Canada’s case particularly the export of their crude oil reserves. Therefore any slowdown in this sector will always hit their economy hard and the CAD will inevitably suffer as a result.
If you have an upcoming Sterling 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 firstname.lastname@example.org.