The GBP/CAD rate has been on a steady decline over the last 20 days seeing the the rate dropping from 1.66 to 1.60. The steady decline in my opinion can be attributed to CAD strength as much as Sterling weakness. The Bank of Canada recently raised interest rates from 0.5% to 0.75% and their is optimism that there will be further hikes in the near future. There needs to be further improvement in the economy and any jump in inflation levels will be considered extremely positive.
Next week the latest Gross Domestic Product data will be released and following better than expected Retail sales this week there could be growth on the cards. The latest inflation reading in the last few weeks was also positive which gives indication that a fall into the 1.50’s is very close. If you do have a requirement to purchase Canadian Dollars then it might be worth considering doing something sooner rather than later. Alternatively Canadian Dollar sellers could close to moving into year highs in the next couple of weeks.
The price of oil also has a major impact on the Canadian Dollar and most of the oil producing nations are playing ball and stick to production restrictions. The price has started to settle with fluctuations coming to a minimum, in short all the data points towards Canadian Dollar strength over the next few weeks with the GBP/CAD inevitably falling below 1.60.
If you do have a question with regards to my forecast please get in touch. When you come to moving large sums of money a movement of a cent can often relate to a significant difference in your returns. Helping you formulate a strategy could make sure you’re in the best position to exchange currency when the market is in your favor, please contact me at [email protected]