The Pound to Canadian Dollar exchange rate dropped throughout last week, after hitting the highest levels seen since the summer of 2018 on Friday the 25th of January.
Sterling saw gains across the board of major currency just over a week ago now when financial markets appeared to conclude that an extension to Article 50 would be the most likely outcome for the UK next month. The UK is supposed to be leaving the European Union on the 29th of March although at the moment the terms of that departure and how the UK will trade afterwards are unclear.
The agreement between May and the EU has so far failed to make its way through Parliament, with the Northern Irish border remaining a key stumbling block. When the deal was voted on Theresa May lost by a record margin so the issue must be resolved if the UK is the leave on the due date.
Aside from the extension, the other option would be for a no-deal Brexit and I believe the chances of this taking place are behind the fall in the Pound’s value last week. A number of key figures have said the Brexit date remains, so the chances of a no-deal are negatively impacting the Pound, although Sterling exchange rates remain close to their highs in many cases.
Canadian dollar strength following positive news
Last week the Canadian Dollar was actually one of the best performing currencies of the majors, as oil prices gained and risk-sentiment returned on the hopes that the US and China will be able to progress in their negotiations.
Pound to Canadian Dollar exchange rate this week
The Pound to Canadian Dollar exchange rate will likely be driven this week by Brexit updates, although Thursday could be busy for the markets as the Bank of England will outline their Interest Rate Decision and the reasons behind it. The Quarterly Inflation Report will also be released around lunchtime so if you wish to be updated if there are any major market moves, do feel free to register your interest with us.
If you wish to be updated in the event of a major market movement or have another question about the factors likely to affect GBP/CAD rates, do feel free to ask me a question using the form below.