GBP/CAD rates seem to have settled around the current levels over recent weeks, with the pound failing to make any inroads above 1.77.
With the UK’s Brexit deadline fast approaching and no agreement yet in place with the EU, sterling could find itself in a precarious position over the coming days.
Whilst it is now clear that the UK will require some type of extension in order to try and push Prime Minister Theresa May’s deal through Parliament, will the EU be prepared to extend Article 50 under the current conditions?
As of today, Brussels have made clear their position and that is that they will only be prepared to offer an extension if the UK can provide a concrete plan as to why this should be granted and what it will achieve.
Theresa May seems to be running out of options, but stressed earlier this week that whilst she would be requesting an extension beyond the current deadline of March 29th, this would be for a short period only.
Those clients holding CAD may be looking at the current uncertainty as a potential opportunity over the coming days.
If the pound was going to make further gains against the Loonie, it may have done so already, so unless a deal is thrashed out very quickly – a scenario which will require a U-turn by many MP’s who have not supported the current Brexit dea – then we could find that the GBP/CAD exchange rate slips back towards and possibly even below 1.75 over the coming days.
However, for the time being at least, and despite things coming to a head over Brexit in recent days, the Canadian dollar is still struggling to find any significant support in the market.
The Canadian economy continues to post uninspiring growth figures and like all commodity-based currencies, the CAD is feeling the effects of a slowdown in global trade.
Looking ahead, until we have a clearer picture on Brexit, it is very difficult to predict any potentially defining trends on GBP/CAD exchange rates. It’s likely that Brexit developments will continue to be the main driving factor behind GBP strength as the originally proposed Brexit date of March 29th looms closer.
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