GBP CAD exchange rates have fallen dramatically following the Bank of England interest rate decision to raise interest rates yesterday and have failed to bounce back today. Anyone looking to sell Canadian dollars for pounds have been presented with an excellent opportunity which came as a surprise to the markets. The fact that interest rates are now not likely to be rising again anytime soon should keep pressure on GBP CAD especially considering the ongoing Brexit negotiations where progress is slow.
The Canadian dollar had seen some considerable weakness in recent weeks after the Bank of Canada signalled that it was not looking to raise interest rates anytime soon. To recap the Bank of Canada surprised the markets with two interest rates increases in July and September which had the impact of strengthening the dollar. Now this rate hike cycle appears to be running out of steam the dollar is once again coming under some renewed pressure.
Canadian manufacturing data could create some movement for the dollar next week after the release of the Ivey Purchasing Managers Index on Monday. Later in the week however the Governor of the Bank of Canada Stephen Poloz will be speaking and this could create substantial volatility for Canadian dollar exchange rates. Any further clues as to when the central bank may consider raising interest rates again is likely to see the market react. This is the major release for Canada next week.
Clients with a requirement to buy or sell Euros for Canadian dollars should pay close attention to events in Spain with the Catalonian crisis far from over. Expect mass protests over the weekend and a process that could drag on for a number of months. Ousted leader Carles Puidgemont is not willing to return to Spain to face charges of sedition, rebellion and misuse of public funds and so the situation is likely to be tangled up with lawyers. The Euro could come under pressure if there is a growing sense of uncertainty creating some better opportunities for CAD EUR rates.
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 myself James on 0044 1494 787 478. Alternatively, I can be emailed directly on firstname.lastname@example.org