Canadian Dollar made gains against the Pound this month
It’s been a tough month for the pound vs the Canadian dollar for a few reasons. The pound has declined due to the political uncertainty surrounding Brexit and the Canadian dollar has been strengthening due to the positive economic data coming out of Canada and the demise of the US dollar. Pound to Canadian dollar exchange rates have dropped by 4 1/2 cents in 4 weeks. To put this into monetary value a CAD$300,000 purchase now costs an additional £4,700.
What will July bring for GBP/CAD exchange rates?
Looking into next month, the US interest rate decision on the 31st July will be a major event, however economic releases before could indicate the FEDs next move. It appears that an interest rate cut is coming, the question is when and by how much? If the FED cuts by 50bps I expect this would provide considerable strength for the Canadian dollar against the pound. A cut of 25bps, I expect will be priced into the market therefore the movement will be limited. To keep up to date with US economic data releases that will impact the US dollar and Canadian dollar exchange rates feel free to express your interest below.
Uncertainty for Sterling continues as Brexit direction remains unclear
As always Brexit will drive the price of the pound. Presently the pound is on the backfoot as it is unclear who will be the next leader. Polls and the bookmakers have Boris Johnson ahead, but polls and bookmakers have been wrong, you only have to go back to the Brexit vote. If Boris Johnson does get into power, then a no deal Brexit will be left on the table and this should concern clients that are converting pounds into Canadian dollars. However, I personally feel that come the end of October, if a deal hasn’t been reached then a snap election looks more likely than a crash out Brexit. Nevertheless, the uncertainty is likely to continue to weigh on the value of sterling.
As stated above data coming out of Canada has impressed in recent weeks. Retail sales numbers showed Canadians were willing to spend on the high street, Unemployment was falling and inflation had increased. If the numbers continue to impress the Central bank will keep interest rates on hold, when the US is making cuts which should benefit the loonie. The major economic indicators in my view are suggesting that it could be a tough month for pound to Canadian dollar exchange rates. If you are buying the loonie and would like assistance achieving fantastic rates whilst receiving support on the market feel free to register your interest below.