GBPCAD rates near 3 month highs, will it keep rising?

Pound unsteady against the Canadian Dollar as Brexit vote just a week away

The pound to Canadian dollar has been rising owing to optimism over Brexit and also expectations of trouble ahead for the US economy. The US dollar has been sold off massively lately and this is also weighing on the Canadian currency too since the CAD loosely tracks the US.

Current concerns over the US centre around just how likely any interest rate hikes will be in the future, closely linked to the fears surrounding US Inflation expectations. Having risen so sharply only recently, we have now seen the US dollar softening as investors concerns mount over just how likely future interest rate hikes are.

The USMCA effect

Focusing on the Canadian dollar, the news had actually been quite good as we have seen the USMCA, the United States, Mexico, Canada Agreement finalised. This has provided some certainty to the situation and given more confidence for all parties. Whilst yet still to come into force, the agreement should see a much improved level of future business between the countries.

This is certainly a possible source of CAD strength in the future but with Brexit optimism abound, the rates could quite easily rise further above the 1.72 in the coming days and weeks. It all hinges on whether or not a Brexit deal can be struck and the expectation is that one will. This will likely lead to sterling rising even higher if confirmed.

Of course, you never can quite tell what is around the corner with Brexit and sterling. So, a move back below the 1.70 is still a real possibility too. The big news is now really the EU Summit next week which could easily trigger volatility on the pound.

I expect the general trajectory to be upward with a test of the 1.74-1.75 if all goes as expected. If you wish to discuss a GBPCAD exchange then please do let us know. You can fill in the form below to send me a message and I will respond to your enquiry directly.