It appears that the pound to Canadian dollar rate will be under increased pressures in June as the market continues to grapple with the two biggest factors influencing exchange rates here, the Trade Wars and the Brexit.
Pound to Canadian dollar forecast
Expectations ahead for the UK and the pound surround the outcome from the Conservative leadership contest too, as now 13 candidates throw their hat into the ring to try and generate interest.
For the future, I would be very surprised to see the pound making too many gains since no-deal seems to be an increasing position as the market has to try and factor this in for the possible outcomes on Brexit. The Conservative leadership race will likely be won by a candidate who is backing no-deal, it seems to try and rule out no-deal as an option on Brexit is to majorly hinder a candidate’s chance of gaining support.
Trade war ramps up, how is this affecting the pound to Canadian dollar rate?
On the subject of Trade Wars, Trump has been ramping up the pressure on the Chinese government, to try and encourage some agreement in the talks. So far, the Chinese have not been forthcoming, and this could lead to more tariffs down the line. Trump has threatened to begin increasing the tariffs at a gradual rate of around 5% per time, until they are at 25% on a range of other goods.
The Trade wars are important for the Canadian dollar because the Loonie dollar is a commodity driven currency, it is sensitive to changes in global attitudes to trade. Moving forward these concerns will undoubtedly rise and the Canadian economy which exports large numbers of oil and lumber to the world, could be negatively influenced by such events.
I think GBP/CAD is currently looking like it will be under increasing pressure as we move forward, as the pound struggles to shake the nervousness a no-deal Brexit will weigh on the currency. We are just above 1.70 but could very easily fall below that 1.70 market level should events for sterling become more unsettled which with Brexit far from resolved looks like a very strong likelihood.
If you would like to learn more on current factors affecting the pound to Canadian dollar rate for an upcoming currency transfer, please contact using the form below.