The pound has rallied against the Canadian dollar after the eagerly awaited Bank of England meeting today saw three of its members vote for an interest rate hike. In a signal to the markets that an interest rate hike could come sooner that most had thought, the pound reacted immediately with a jump higher. GBP CAD has risen to a high of 1.6993 although still some way lower than before the UK election on Friday.
There could be a big market movement for this pair in the coming days as a formal announcement is expected to be made confirming a Conservative government which is to be supported by the Democratic Unionist Party (DUP). Nothing is certain at this stage in terms of its formation but in my view the deal will go ahead and the pound should see a rally on the back of it.
The markets are looking for certainty as to who is running the country and this should be positive for the pound. A move higher to 1.73 for GBP CAD seems plausible in this outcome. Clients looking to buy Canadian dollars would be wise to get in touch to set things up ready for the potential spike higher.
The Canadian dollar received a small boost today after manufacturing shipments for April showed an improvement although upcoming data should create more volatility for the loonie. Next week should be very interesting for the Canadian dollar with a raft of economic data. Retail sales data is released on Thursday whilst Consumer Price Index inflation numbers are released on Friday which should make for an interesting end to the week.
If you would like further information on Canadian dollar exchange rates or any of the major currencies and to discuss how we can assist then please feel free to contact me on 0044 1494 787 478 and ask one of the team for James. Alternatively, I can be emailed directly on [email protected]