In today’s GBP to CAD forecast I look at why the pound has moved to a three week high against the Canadian dollar and whether further movement should be expected in the weeks to come.
The UK is now 31 days away from the departure from the European Union, however there is an argument to suggest an extension is on the horizon.
Today UK Prime Minister Theresa May will give an update on the state of the ongoing Brexit negotiations, this follows her statement yesterday when she delayed the meaningful vote which was supposed to take place this week. The vote was delayed as it would not get passed in its current form, therefore I don’t expect the update today will be a major market mover as it will be more of the same.
However, I believe the reason why the pound is strengthening is because the chances of a no deal Brexit are diminishing. It’s likely if Theresa May does lose the vote next month she will apply for an extension of Article 50 which will be granted by the EU. Furthermore Labour have gone one step further this morning and have stated if Theresa May fails to get a deal through they will back a second referendum, however I don’t see that gaining much traction as there are many Labour MPs that have ‘Leave’ constituencies.
Is now a good time to buy Canadian dollars?
With the GBP to CAD rate trading at a 3 week high, this is a great short term window of opportunity for Canadian dollar buyers. Even though the chances of no deal Brexit are diminishing there is still a chance. Therefore as we enter March, I still expect the pound could come under pressure. Longer term, I expect it could be a positive year for the pound, following a Brexit deal being agreed or an extension of Article 50, which would show intent that the UK and EU want to agree a deal.
Selling Canadian dollars
Clients that are selling Canadian dollars to buy sterling, are still achieving an extra 17 cents compared to pre-Brexit levels, and in the current climate I believe this is worth taking advantage of.
For more information in regards to Brexit and how this event could impact your currency exchange feel free to get in touch. You can ask me any questions using the form below and I will respond to you personally.