The pound is looking much stronger against the Canadian dollar as we get closer to understanding what Brexit will mean, markets are being kinder to the pound in the expectation of a softer Brexit which will see less disruption to the UK economy and therefore is less of a concern for sterling holders. GBPCAD rates are also higher on the uncertainty over the pace of future Canadian interest rate hikes, in short the good news for Canadian dollar buyers looks likely to continue.
Of course the 1.80 is the next key level many clients buying Canadian dollars will be looking towards, there is a slim chance Theresa May’s speech could see the pound higher on Friday although I do feel much of this good news is priced in. Therefore if you need to buy Canadian dollars and are hanging on hoping for much more of an improved rate you might struggle to see huge gains, 1.80 would be the next sensible target.
On the case for further interest rate hikes the Bank of Canada have been notably cautious in their tone and where an aggressive pace of future hikes was being pursued which had driven the CAD higher, we are now seeing a less hawkish (strong) approach being adopted. For clients looking to buy Canadian dollars this is of great value since it is the reason for the weaker Loonie dollar. Any sign this trend will continue could see the GBPCAD rate rise further towards that valuable 1.80 level.
For more information on the trends driving your exchange rate and the best options to consider when buying or selling foreign exchange, please feel free to contact myself Jonathan Watson directly. I have worked as a specialist currency broker for many years assisting my clients with the best rates of exchange and offering insight to allow them to make informed decisions on when to conduct their currency exchange.
Thank you for reading and please contact me on [email protected] to discuss further the market and your options.