Canadian dollar hits 6 month high vs the Pound
The Canadian dollar has been performing very well against the pound recently. GBP/CAD exchange rates have recently hit 1.67 which is the lowest since December 2018. The pound has been struggling with the ongoing uncertainty of Brexit and the leadership election.
Meanwhile, owing to the value of oil prices going up this has helped the Canadian dollar. The Canadian dollar has been strengthening in part due to the imposition of US oil sanctions. As they are a petro-dependent currency this tends to strengthen the currency when oil prices go up.
However, as much of Canada’s oil comes from the tar sands this is difficult and expensive to extract. Therefore, when oil prices fall again this becomes non-viable and this could see the Canadian dollar weaken if this happens.
Tomorrow morning Canada releases its latest inflation data. This is expected to see an improvement for year on year, so this could lead to further strength. The reason is that this could provide evidence to support an interest rate hike in Canada if inflation goes up.
Retail Sales are also due out this week on Friday so expect to see further movement for GBP/CAD exchange rates on Friday afternoon.
Leadership election and the impact on the Pound vs the Canadian Dollar
Turning the focus back to the UK and the leadership election will provide us with more insight today. There are six candidates in the running and they must gain 33 votes to stay in the race. Boris Johnson is the front runner at the moment but so far this has done little to help the value of sterling.
We are still just over a month away before we know who the new Prime Minister will be. Therefore, there is still a lot of uncertainty surrounding sterling, so I think we could see GBP/CAD exchange rates move lower.
Therefore, if you’re in the process of buying Canadian dollars it may be worth getting this organised in the near future. If you would like a free quote and would like to save money on exchange rates compared to using your own bank, then contact me directly and I look forward to hearing from you.