The pound to Canadian dollar exchange rate has held steady above 1.63 for the GBP to CAD pair after the Bank of Canada held interest rates steady at 1.75% where it has remained since October 2018. The central bank has upgraded its growth forecast for 2019 to 1.3% up from 1% signalling confidence in the Canadian economy.
Ongoing US / China trade war a concern for the Canadian dollar
The Bank of Canada have raised concerns however with the global growth outlook which may have a negative impact on the Canadian economy and the Canadian dollar. The ongoing trade war between the US and China still continues to be the main cause for concern. With no breakthrough on a trade agreement the Canadian dollar is likely to remain sensitive to any trade developments. Should some form of agreement be reached then this could prove positive for Canadian dollar exchange rates.
Brexit still the key for pound sterling exchange rates
Brexit meanwhile remains the main driver for sterling exchange rates and the GBP vs CAD pair. Boris Johnson remains the firm favourite to become the next Prime Minister and despite some serious political attacks on him following questions surrounding the resignation of the UK’s Ambassador to the US Kim Darroch, he is nonetheless likely to be announced as PM on 23rd July.
The pound to Canadian dollar exchange rate is likely to see high volatility with new leadership in the UK and a change in direction on Brexit.
Is now a good time to sell Canadian dollars to buy pounds?
Those looking to sell Canadian dollars to buy pounds could see some new opportunities ahead should Boris Johnson start planning in full for a no deal Brexit.
The last few years since the 2016 referendum have shown that when the no deal option becomes credible the pound generally moves lower. The impact on a new British Prime Minister should not be underestimated and already this week noises have been made from other political big beasts including former Prime Ministers seeking to give Parliament as much voice as possible as opposed to the Government of the day.
Only yesterday former Conservative Prime Minster Sir John Major said he would seek to take legal action against Boris Johnson if he tried to prorogue Parliament to force a no deal Brexit outcome. Once again tensions are building between the Remain and Leave sides of the Brexit debit as the deadline of 31st October approaches. Expect high volatility for GBP/CAD exchange rates in these coming months.
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