The pound to Canadian dollar exchange rate has fallen lower in this last week with rates sitting below 1.74 for the GBP/CAD pair.
Brexit uncertainty weighing on sterling exchange rates
Deadlock in Parliament remains as cross party talks come near to a close. It has been announced that a 4th and possibly final vote on the withdrawal agreement will take place in the first week of June and could see major volatility for GBP vs CAD.
If the current deal does not make its way through the House of Commons then the only two options left are to proceed with a no deal or to invoke Article 50. The European elections on May 23rd are also paramount in this process as the vote will likely act as a confirmation of the will of the British people. If the remain parties such as the Liberal Democrats or Change UK perform well then their respective leaders will claim this as a victory and that there should be a second referendum. However if the newly formed Brexit Party run by Nigel Farage does well then it will be seen as an instruction to leave without a deal. This would likely result in further weakness for the GBP to CAD pair as there will be a greater degree of uncertainty in terms of Britain’s future.
US China trade war influencing GBP/CAD rates
The Canadian dollar as a commodity currency is impacted by trade developments and the going trade war between the US and China is likely to see added volatility for Canadian dollar exchange rates. Last week Donald Trump imposed tariffs on Chinese goods worth $200 billion and has threatened more tariffs. China has since retaliated with tariffs on $60 billion worth of American goods heading for China.
There will be a meeting between the US and Chinese leaders at the next G20 Summit and any agreement could see those tariffs not actually take effect. It takes around one month for the goods that were shipped from China last Friday to reach the US, leaving some time for a deal to be hammered out. The decision puts pressure on both sides to come to an agreement and could focus minds. Any further escalations could see the Canadian dollar come under renewed pressure.
If you would like to learn more about these factors and the impact they could have on your Canadian dollar currency exchange, feel free to get in touch using the form below where you can contact me directly. I look forward to hearing from you.