Overall the market is expecting the pound to enter a more volatile phase as we get further news on just what to expect from the Brexit plans and negotiations. The market has been pricing in sterling weakness and as such the triggering of Article 50 was at the end of a bit of a non-event. Market watchers expecting some big improvements in the rate were left disappointed by the lack of movement but at least it wasn’t bad news for Canadian dollar buyers. Sterling could easily come under fresh pressures as the negotiations commence, the UK does appear to be in a much weaker position but only time will tell.
The Canadian dollar has been weaker as the price of Oil falls which has helped GBPCAD buyers to some of the best rates we have seen in 2017. The price of Oil is expected to remain stronger which should only support the Loonie dollar and most expectations are for the currency to strengthen sooner than later. If you have a transfer to make involving the pound and Canadian dollar then making some plans in advance is the best way forward.
We are now at a very important junction as markets eagerly await any economic data that shows the UK is struggling outside of the EU. The price of Oil should continue to help support the CAD but ultimately the pound will I believe be the main driver. Another factor is, of course, the strength and weakness of the US economy which influences the Canadian economy and therefore the Canadian dollar.
The forecast for the coming weeks is very difficult to assess but is likely to err on the lower side. Most analysts are expecting the pound to remain in the spotlight so clients looking to buy or sell should be making plans sooner rather than later. For more information at no cost or obligation please speak to me Jonathan by emailing [email protected] or calling 01494 787 478.