GBP CAD has seen a good boost to start the week with gains of almost 1% for the pound against the Canadian dollar. Last week was on the whole negative for sterling exchange rates as the uncertainty over Brexit continues to be the single biggest driver for the UK and hence the pound.
Today’s rally appears to be on the back of an expected statement from UK Prime Minister Theresa May to the House of Commons this afternoon where it is understood she will give no further offers or discussion until the prospect of a future trade agreement is discussed. The European Union reaction will be the one to watch out for but any softening of stance is likely to see GBP CAD rally further.
Last week saw the German BDI (Federation of German industries) make clear that Germany seeks to protect the single market whilst also telling German businesses that are based in the UK to make contingency plans for a very hard Brexit. The news had an instant negative impact on the pound with levels falling against the Canadian dollar as well as all of the other major currencies.
This development though could see the pound rally if the intervention kick starts negotiations and progresses them. The risk for those clients looking to buy Canadian dollars is if the reaction is negative for the European Union the this could see GBP CAD weaken. Such an outcome would see a good window of opportunity for those clients looking to sell Canadian dollars.
Meanwhile the Canadian dollar remains in a strong position after those two interest rate increases from the Bank of Canada in July and September. The prospect of more interest rate increases potentially on the cards and a weaker British economy could see rates for GBP CAD move lower. Canadian unemployment released Friday remained steady at 6.2% suggesting the Canadian economy is performing ok and the rising price of oil should help the dollar going forward.
If you would like further information on sterling or 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]