Pound to Canadian dollar exchange rates have slipped lower as Brexit uncertainty continues to drive the price of sterling. UK Prime Minister Theresa May was in Brussels yesterday for the EU summit, seeking concessions or reassurances over the Irish backstop which has proved to be the most contentious of issues.
The response from the EU however was not in the Prime Minster’s favour having stated that the withdrawal agreement is not to be reopened for renegotiation. Theresa May made a special plea last night to get the deal over the line and suggested a time limit on the backstop, but her performance was described by commentators as bad and vague.
Further Sterling weakness could be on the horizon
GBP/CAD rates have fallen to 1.6850 for the pair and there could be further weakness in the pound if there is more hostility against the Prime Minister from within the Conservative party. It was only this week when a vote of confidence was held in the Prime Minister and although she won that vote there were still over 100 Conservative politicians who voted against her. There are calls for her to resign and these views may harden in light of the disappointing outcome that she received from the EU last night. Clients looking to buy Canadian dollars are likely to struggle to make major headway.
Oil prices affecting GBP/CAD rates
In Canada the Bank of Canada has highlighted risks ahead stemming from a fluctuating price of oil and also the risks to global trade as a result of the trade war between the US and China. These risks are significant and are likely to create a volatile period ahead for the Canadian dollar in the New Year.
Trade negotiations between the US and China, which are relevant, have hit a stumbling block after the US arrest of a high ranking Chinese national which has been involved with the Chinese telecoms company Huawei. It has been reported that there may be an intervention from US President Donald Trump which could make a deal to trade more likely. For the moment any future trade tariffs are on ice for three months whilst a deal is potentially hammered out.
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