Pound to Canadian dollar forecast: What factors are affecting rates in May?

GBP vs CAD exchange rates ahead of 4th meaningful vote in British Parliament

The pound to Canadian dollar exchange rate has been very volatile as we enter some tumultuous times on global trade and also the UK political scene. The trade wars have escalated with Donald Trump now implementing $200bn worth of tariffs on Chinese goods which has seen so far a fairly muted reaction, but could easily unsettle the Loonie dollar.

GBP/CAD rates are currently at an excellent elevated level which is presenting a great time for clients holding pounds to buy Canadian dollars, since it is only 2-3 cents off the high in the last year. When we consider some of the lows to buy Canadian dollars with pounds were in the 1.65’s, to have trading rates some 10 cents better is most welcome.

Factors affecting GBP/CAD rates

If you have a transfer to consider I think that the behaviour of the Canadian Central Bank is also important, the Bank of Canada did keep interest rates on hold in April but might well change their mind at their next meeting on the 29th May.

Another key factor is the price of Oil since Canada is a major petro-exporting economy. The rise and fall of the price of Oil will have a major effect on the price of the Canadian dollar and this has actually been a factor which is to a degree preventing too much weakness.

GBP/CAD levels look set to remain in a mixed state as we await further concrete news on the latest twists and turns we might expect. The pound could quite simply lose value owing to the fears and troubles over how Brexit will pan out.

It is not wholly unexpected that we could see the pound collapse if Mrs May is removed from government, although she is adamant she is not going anywhere! I predict GBP/CAD levels will remain between 1.73-1.77 with the potential to move outside of these ranges should we see some overly positive or negative news on Brexit.

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