The Pound has fallen against the Canadian Dollar (the GBP/CAD rate is 1.6868 at the time of writing this), as the reaction to Theresa May’s Brexit text has been mostly negative, with both Brexiteers and Remainers demonstrating their disappointment of May’s plan.
So far the UK Prime Minister has remained firm in her conviction that the deal is the best way for the UK to proceed with its EU divorce. However, the concerns remain and there could be further Government resignations today or early into next week that would surely put pressure of May’s position as Prime Minister. On Wednesday evening after a 5 hour Cabinet meeting May announced that the Brexit deal has been arranged between the UK and the EU, but since then she has struggled to get the support needed to push the plan through Parliament and there have been some key resignations.
Perhaps the most prominent was that of Brexit Secretary, Dominic Raab. He had only been in the role for a little over 100 days after being appointed after the former Brexit Secretary, David Davis stepped down this summer. It appears that the position has since been offered to the Environmental Secretary Michael Gove, although he has declined the offer. There is talk that he could be the next key figure to resign, which would surely put further pressure on May’s position.
GBP/CAD rate dropping despite CAD weakness
The GBP/CAD rate has dropped by 2% over the past day, with much of the drop taking place yesterday morning in the wake of the news releases.
The CAD has been under pressure itself with the USD/CAD rate hitting its lowest level since July this year. Despite the CAD weakness the downward pressure on the Pound has been the stronger of the two, which has been the reason for the drop in the GBP/CAD exchange rate.
Next week on Friday there is a raft of data due out of Canada such as Retail and Inflation data. If you wish to plan around this event do feel free to register your interest with us as there could be volatility as a result of the releases.
There are no major economic announcements due for release today, so I expect the Brexit to continue to be the main driver of GBP/CAD exchange rates. If you wish to be updated in the event of a major market movement, do feel free to get in touch using the form below: