Canadian economic data to influence direction of GBP/CAD rates

Pound to Canadian Dollar forecast CAD closing in on a two year high against GBP

This week is an important week for Canadian dollar exchange rates as Consumer Price Index numbers which cover October and November are set to be released on Wednesday. Forecasters are suggesting that the number will ultimately dictate whether the central bank decide to raise interest rates in January or hold off until Q2 of next year.

The consensus at present is for November’s figure to fall to -0.2% from 0.3% and yearly figures to fall to 1.9% from 2.4%. If this materialises I expect CAD to lose further value and fall against GBP.

However clients that are holding onto GBP waiting to buy Canadian dollars, the future is looking bleak at the moment and if the rates improve due to Canadian inflation I believe that is a spike to take advantage of.

Date for Parliament’s Brexit vote now set

UK Prime Minister Theresa May has now given forward guidance in regards to Brexit and when the meaningful vote will be. She made it clear that MPs will break for the Christmas break on Thursday and not return until 7th December. When they return they will have a week of debates and the following week the meaningful vote will follow.

As it stands it’s clear to see that Theresa May is not going to get the vote through the House of Commons. If nothing changes, it’s extremely likely at that point the leader of the opposition Jeremy Corbyn will file a vote of no confidence on the Government and he could actually win.

If this was to occur then parties would try to form a Government and at the moment it looks unlikely that this would happen, therefore a General Election could be on the horizon. The thought of a General Election will send shivers through the markets and the pound could have another rough year ahead.

UK inflation due tomorrow

In other news the UK is also set to release inflation numbers tomorrow. Monthly figures are set to remain fairly stagnant around 0.2%. Unless there is a big surprise I expect this data release to have a minimal impact on GBP/CAD exchange rates.

If you have plans for a currency transfer involving the pound or the Canadian dollar I would strongly recommend getting in touch to discuss your position. You can send me a message directly using the form below and I will respond to you personally: