Canada’s fall in exports could affect Pound to CAD forecast
Even with the lack of clarity surrounding Brexit Sterling has made moderate gains against the Canadian Dollar since August of last year.
This has certainly not been without setbacks for those looking to purchase the Canadian Dollar with Pounds. The probability of a no deal scenario rising and falling has caused volatility on the exchange. We have also seen the chances of a rate hike fluctuating and the same can be said on oil price, Canada’s primary export.
Although the Pound will remain fragile until we have substantiated progress on Brexit, I think following Article 50 we could see impressive gains against the Canadian Dollar.
Pound to CAD forecast: The outlook for the Canadian Dollar
Canada has a heavy reliance on exports. At present in Canada there is fairly weak productivity which means that Canada is starting to become a higher cost for producers than their next door neighbours the United States and in turn this is hurting the Canadian economy.
This could also effect future monetary policy, putting a halt to any potential rate hikes from the Bank of Canada (BoC) if there is an economic down turn. In fact, we could see a drop in rates to weaken the Canadian Dollar in an attempt to boost exports.
Household debt is a concern in Canada and with debt continuing to grow spending this year is likely to decline.
Keep an eye on employment figures tomorrow as this has the power to influence Canadian Dollar value and also BoC Governor Poloz’s speech as this could give hints to monetary policy moving forward.
It is also worth keeping an eye on Canadian Retail sales on Friday, this could be perhaps the most influential release of the week.
I feel that despite Brexit we could see gains for Pound to CAD rates.
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