Sterling has made gains against the CAD over the past few weeks, with the pair now trading above 1.77.
The Pound has enjoyed a positive run off the back of a run of solid economic data and global concerns around falling oil process.
The price of crude oil has fallen to a five-month low, which is likely to have a negative effect on Canada’s export driven economy. With Oil being their main export any downturn has an instant negative effect on their economy and the CAD is likely to lose value as a result.
Due to the CAD being a commodity based currency, it is heavily reliant on global growth and a such any upturn in the US & China, two of the globes largest economy can drive these currencies values up. This means that investors will look to GBP/CAD for example and see the opportunity to make more money on bigger market swings and such the pairs value can fluctuate quite substantially.
Oil prices have remained unsteady for months now and as such I would be wary about assuming the current dip is there to stay, so those clients holding Sterling may wish to take advantage of the current market value and remove any uncertainty moving forward.
The Pound initially found support following the announcement of a UK general election in June and the likely result of a Conservative victory, bringing an element of stability to the markets due to the continuity it will bring over the coming years. However, this positive spike seems to have cooled somewhat and based on some worrying reports this week, in regards to the UK’s Brexit negotiations and how tough they are likely to be, are you prepared to risk losing the gains made for Sterling over the past month?
My overall feeling has been that clients holding the Pound should be looking for short-term market opportunities, rather than hold out for long-term sustainable gains whilst so much uncertainty around the UK economy remains.
UK Prime Minister Theresa May has come out fighting this week, in response to reports that the UK has little understanding of how the EU works if it thinks it will be getting a good deal in regards to our Brexit. Whilst political jostling could account for a portion of this, I do feel we are in for a rocky road over the coming months. As such I would be looking to protect any GBP/CAD positons, rather than gamble on an extremely uncertain market.
If you have an upcoming GBP or CAD currency transfer and would like to be kept up to date with all the latest market movements, or simply wish to compare our award-winning exchange rates with your current provider, then please feel free to contact me on 0044 1494 787 478 and ask one of the team for Matt.
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