GBP/CAD rates have fallen this week, as Brexit fears grow amongst investors. The pair have fallen towards 1.63, with Sterling showing little signs of a sustained recovery ahead of the triggering of Article 50 later this month.
The Pound has taken a hit across the board, despite reports that today’s UK budget will carry an upbeat tone.
UK Chancellor Phillip Hammond is expected to outline a substantial “Brexit” fund of up to 60bn, which will be a safety net for the UK should economic developments go against us following our separation from the EU. We also expect to see UK growth forecasts raised from 1.4% to at least 1.6% and if confirmed we could see Sterling’s recent slide halted.
However, even a bullish tone by the Chancellor is unlikely to give Sterling a substantial boost and as such I would be tempted to protect my Sterling positions around the current levels.
The markets are continuing to prepare themselves as we enter uncharted territory, as no country has left the EU before. As such we have no benchmark to compare with and investors will be questioning how our economy will fair in the months and years to come, once the UK goes it alone.
The current market remains unpredictable at best and with global investor confidence fragile, commodity based currencies such as the CAD are also at risk. They are reliant on global growth, in Canada’s case particularly the export of crude oil. Therefore, any slowdown in this sector will always hit their economy hard and the CAD will inevitably suffer as a result.
For these reasons those clients should be looking for short-term market spikes, rather than gamble on longer-term gains in my opinion.
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].