The Canadian dollar has been strengthening in recent weeks as it becomes more and more likely the Bank of Canada will raise interest rates. Expectations for the pound to rise against the Canadian dollar looked limited until this week when Inflation surprisingly jumped and the pound made some significant gains on the Loonie rising to almost a one month high. The big question for me is now will the Bank of England raise rates and what can this do to the GBPCAD exchange rate pairing?
The pound is looking much more resilient and has fought back strongly against the Loonie after weeks of losses for sterling. With the market now believing there is an increased chance of a UK interest rate hike the pound has risen back against the Loonie rising back over 1.60. This is presenting a very good opportunity for those looking to buy Canadian dollars with pounds.
If you have a transfer in the future there is now an increased chance of the pound rising although ultimately I just feel the UK will not raise interest rates since market conditions will not allow it. I think with UK economic growth so low the Bank of England will struggle to make the case for a rise and the market will once again be disappointed.
In the meantime the Canadian dollar should remain stronger as the price of Oil remains buoyant and also the Canadian economy continues to grow. Whilst the US are looking a little shaken from the recent Hurricanes, there is a good chance of the US economy continuing to roar ahead. This should also support the Canadian dollar.
All in all I think the Canadian dollar will continue to perform well and better against the pound. If you have a transfer to make and wish to be kept up to date with the latest trends please speak to me Jonathan by emailing email@example.com.