The Canadian Dollar has been rather range bound in the last 3 months oscillating between 1.80 and 1.72, this has presented some better rates for Canadian Dollar sellers for Pounds. The general outlook on the Canadian Dollar has been mixed with many different factors driving the levels and creating a slightly trickier than usual pair to predict.
Trade Wars have been a big factor on the Canadian Dollar since it has stemmed from Donald Trump and his chatter over NAFTA and also the potentially negative effects on the global economy. Since Canada is a net exporter of raw materials, any big changes in the global economy have the power to influence the rate.
July is looking to be a very important month for the GBPCAD levels since we have the economic data gently becoming more supportive for the UK and for the Bank of England to consider raising interest rates.
Overall, a mixed picture will continue but I think GBPCAD could now begin to trade much higher as the Bank of England look to raise interest rates in August and the Trade Wars concerns weigh heavily on the Loonie.
Key news will be GDP, Unemployment data and Inflation data, as the Bank of England has linked raising interest rates very closely to these issues. A target level of 1.80 could now be very realistic, clients looking to sell Canadian Dollars for Pounds might wish to be preparing an exit strategy sooner than later.
GBPCAD looks set to be driven more by the latest news from the UK in July as Trade Wars concerns persist but ultimately the bad news is in the market, unless there is any major escalation of the issue, or if for some reason the events can be contained or the relevant parties back down.
I expect the Trade Wars will continue to impact markets but with no major significance, GBPCAD should move higher towards 1.80 so long as the economic data released supports the move. Feel free to get in touch here if you’d like further information on any of the above.