The Canadian dollar looks stronger against the pound at present with rates for GBP CAD trading at around 1.70 for the pair. The ongoing NAFTA negotiations continue to be a big driver for Canadian dollar exchange rates as there is still an agreement to be found. US President Donald Trump has said recently that the trade talks are taking too long which saw the Canadian dollar come under some pressure. However a positive response from Canada has helped support the Loonie after stating there was still a chance that a deal could be reached. It has emerged that an ultimatum has been given to Canada that it must sign up to the deal by Sunday.
Depending on the way these events play out, there could be considerable volatility for the Canadian dollar from Monday. As far as GBP CAD is concerned this weekend could hold the key with the Conservative Party conference. An article from Boris Johnson published in the Telegraph this morning could help direct the course of events in the Brexit negotiations which growing support for a Canada plus style trade agreement. This in my view will be the single biggest driver for sterling exchange rates in the coming weeks and any positive developments should be seen as welcome news for the pound against the Canadian dollar.
Clients looking to buy Canadian dollars with pounds could see some better rates on the horizon if it looks like Britain can find a deal that works with the EU, but also one that Theresa May can get through Parliament. Politics are very much at play and the Labour party in opposition has said that it will not support the Government’s Brexit strategy.
Expect more volatility next week after the Conservative party conference, as more clues are offered on whether the Prime Minster sticks with her Chequers proposal, or moves toward the Canada style arrangement which also is not supported by all members of the Conservative party.
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