The Pound has been making some solid gains vs the Canadian Dollar in recent weeks as commodity prices globally have been falling. Oil prices have started to drop off and with the ongoing Trade Wars between the US and China this has caused a knock on effect on any commodity based currencies including the Canadian Dollar.
The US Federal Reserve also raised interest rates for the final time of 2018 at the end of last year, which now makes bond yields in the US very attractive for global investors and this is another reason for the fall in commodity based currencies.
However, the main problem that the Pound is facing vs the Canadian Dollar is what may happen in the next few weeks concerning the latest Brexit news.
MPs will be returning from their Christmas break on Monday and will be looking to vote on Theresa May’s Brexit plan in the week commencing 14th January.
With December’s vote having been cancelled previously owing to the clear lack of support I think the same thing could happen again as MPs appear to be in favour of rejecting the deal and this could move us towards a no-deal Brexit.
However, the European Court of Justice have said on a number of occasions during the last few weeks that the UK is able to revoke Article 50 at any point up until the end of March when the UK is due to leave the European Union. If this does happen this could result in a huge amount of volatility for Sterling exchange rates.
Therefore, if you have an upcoming currency requirement involving Sterling and the Canadian Dollar it is important that you are well prepared for what could be a very busy next 3 months.
In the short term, Canadian unemployment data is due out on Friday afternoon so anything different from the expectation of 5.7% could see movement for GBP/CAD exchange rates.
Unemployment in Canada during the course of 2018 has been improving so another positive release could see Canadian Dollar strength to end the week.
If you have a currency transfer and need to exchange Canadian Dollars then contact me directly for a free quote and I look forward to hearing from you.