Compared to this time last week pound to Canadian dollar exchange rates are trading 1 1/2 cents (1.43%) higher. To put this into monetary policy a £200,000 transfer into Canadian dollars generates clients an additional CAD$5,000. There are many reasons to why exchange rates fluctuate however I’m putting the movement down to Donald Trump’s social media activity.
Donald Trump causes volatility on currency markets
Friday afternoon the President took to his twitter account to tweet the following, ‘the United states has been losing, for many years. 600 to 800 billion dollars a year on trade. With China we lose 500 billion dollars. Sorry, we’re not going to be doing that anymore!’ As this is bad news for the global economy, commodity currencies such as the Canadian dollar can come under pressure and this is what we have seen. Now that the Chinese negotiators are in Washington, at any point this story could escalate. Trying to second guess the outcome of the trade war is difficult, is this a clever bluff or would he actually go through with more tariffs. Either way this event has the potential to cause havoc on the currency markets.
Cross-party Brexit talks
In other news UK Prime Minister Theresa May is continuing the cross-party talks with the leader of the opposition Jeremy Corbyn today. After the local elections both leaders have made it clear they want to get on with delivering Brexit after losing many local posts. However it looks extremely unlikely that a deal will be reached between the two leaders as Downing Street plan for a temporary customs union concession appears to be fudge and nothing more.
By the end of the week I expect the PM will confirm that the cross-party talks are over, and MPs will have another vote on the path forward. I don’t see this as a sterling positive event short term, therefore for clients purchasing Canadian dollars with pounds, the improvement off the back of Donald Trump’s tweet may be worth taking advantage of. For more information on pound to Canadian dollar exchange rates feel free to fill in the form below and I will personally give you a call.