Where next for GBP/CAD? (Daniel Johnson)

GBP EUR Exchange Rate: Weekly Review July 16  

Trade Deals will be a main factor in Sterling value

Trade negotiations following the triggering of article 50 will be crucial to the value of the pound. Theresa May has been very positive as to how trade deals will go. Yesterday she stated the UK will be able to use the blue-print of up to fifty trade deals that are already in place .

The PM said “It will be possible to simply cut and paste deals with countries such as South Korea, Mexico and Jordan.”

May has caused a stir of late, stating the negotiations could take longer than the current two year target. This shouldn’t really come as a surprise. Head EU ambassador, Sir Ivan Rogers recently resigned claiming that the two year target was unrealistic.

Some negotiations could well take longer than expected, but I am still of the opinion Sterling is undervalued against the Canadian Dollar. There will be ups and downs as always, but I think Sterling will rally slowly and steadily.

OPEC Deal could influence Canadian dollar value

Keep an on how the OPEC (Organisation of Petroleum Exporting Countries) deal develops. Oil has been in oversupply over the last few years and has seen oil slump in price due to the abundance of oil available. There has been a deal in place to cut oil supply and the value of oil has increased as a result.  There are currently negotiations in progress to extend the deal. If this come to fruition the Canadian Dollar could benefit. Canada’s largest export is oil, therefore oil price has bearing on Canadian Dollar value.

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