The pound to Canadian dollar exchange rate has moved higher with the latest news that there is now less chance of a no-deal Brexit. Clients with a position to buy or sell the Loonie dollar, against the pound could be in for a very volatile month as the market weighs up some key points of interest, notably Brexit, the Trade Wars and also a volatile price of Oil.
GBP/CAD rate fluctuates with Oil prices and global trade
Oil is a key commodity for the Canadian economy, and the value of this precious export to the Canadian economy ensures the GBP/CAD rate can fluctuate as the price of Oil rises and falls. Whilst the pound has risen on Brexit optimism, the Canadian dollar has been stronger which is acting as a counter.
The Trade Wars are also shaping behaviour on the Canadian dollar as investors track the latest news on the US-China and debate its possible implications on the global economy. The Canadian dollar as a commodity currency will be driven by attitudes to risk and the ever-changing sentiments in the currency market.
Essentially, the outlook on global trade is now more shaky because of increased uncertainties over the global economy from Brexit and the Trade Wars. This could easily see the Canadian dollar losing ground, particularly when its biggest trading partner the US, is currently scaling back on their growth ambitions with lower growth and less chance of interest rate hikes.
March is going to be a pivotal month for Brexit with the latest news from Parliament on the 12th, this will shape market expectations ahead and we could still see Brexit delayed but many expect it will all go ahead on the 29th March, sterling could then come under fresh pressures which will only cause further troubles ahead. The UK economy is still struggling and even with Brexit finalised there could still be plenty of tough questions ahead for GBP/CAD exchange rates.
I expect trading levels between 1.70 and 1.80 for this month, please get in touch if you wish to run through or discuss a forecast for your exchange.
If you wish to be updated in the event of a major exchange rate movement, or would like an second opinion on a transfer you’re planning on making, do feel free to send me a message using the form below: