GBP/CAD rates have fallen during Tuesday’s trading, as the CAD found some support around 1.70.
The CAD hit a high of 1.6873, giving it some much needed respite following the recent loses against Sterling.
Sterling’s performance against the CAD has not been mirrored against most of the other major currencies and therefore the recent spike is somewhat surprising.
Considering how much pressure the UK economy has been under of late, this improvement has been taken advantage of by many of our clients with a short-term GBP/CAD currency exchange requirement.
It is likely that the Pound’s value has been boosted by a lack of investor confidence in the Canadian economy, with the CAD’s value a direct impact of this negative market perception. One of the driving forces behind this dip in market confidence, is likely linked to the re-negotiating of the North Atlantic Trade Agreement (NAFTA).
The fifth round of talks got under way last week but with speculation that the agreement could breakdown due to one or more members walking away, the markets have created negatively to this potential outcome.
Another reason for the Cad’s recent dip is a fall in inflation figures, which has heaped further pressure on the Bank of Canada to act. Considering they only recently hiked interest rates, it is seems they are reluctant to act again and this is only adding to the current uncertainty.
All of this has conspired to push the CAD’s value down and this is inadvertently boosting Sterling’s. However, this means that the current value on GBP/CAD could be viewed as slightly over-valued, especially when you consider the market perception around the UK economy remains negative.
We also need to consider how the markets may react to tomorrow’s UK Autumn budget. Whilst this generally does have a significant impact on the currency markets, UK Chancellor Philip Hammond is under pressure following the last budget in March, which was widely criticised.
For this reason I would be very tempted to take advantage of the current highs and remove any market risk.
If you have an upcoming GBP or CAD currency transfer to make you can contact me directly on 01494 787 478. We can help guide you through this turbulent market and as a company we have over eighteen years’ experience, in helping our clients achieve the very best exchange rates on any given market.
Our award inning rates can be accessed very easily over the phone and I can keep you posted with key market developments ahead of any prospective exchange you need to make.
Feel free to email me directly on [email protected] to find out all the options available to you ahead of your currency transfer.