Strong CAD capitalizing against weak GBP: What has been influencing exchange rates?
A series of events have arisen to create the best time to sell Canadian dollars for pounds since October 2017. Despite the Bank of Canada stating any interest rate hike is off the agenda for now, by now committing to any cuts the loonie is firmer. Also, the price of Oil has rallied following a decline in inventories, and also the G20 Summit not panning out as negatively as many had previously suspected, giving confidence int eh global economy. Sterling is of course suffering from Brexit uncertainty, with a pessimistic view of the UK developing as it appears to be headed for a no-deal Brexit.
Pound to Canadian dollar levels have nudged 1.6330, breaking the 1.6370 interbank rate we saw back in Oct 2017. The turnaround on this currency pair has been quite remarkable considering in May the interbank rate was 1.7715. The difference here is 8.45%, which if you were transferring 250,000 CAD back into sterling comparing at these high to low difference would generate an extra £11,900 return.
Pound to Canadian Dollar forecast: Predictions for the GBP/CAD exchange rate
The outlook ahead is still mixed for both currencies, but with the pound appearing to be largely defined by the outlook on Brexit, and both candidates for the top job of Prime Minister openly backing a no-deal exit, sterling might well struggle in the days and weeks to come. We know Brexit has been the biggest driver of uncertainty for sterling, and it does not appear to be diminishing anytime soon in its importance. The big news will be the 22nd July when we have the latest news from the Conservative leadership election and this might be a period of volatility for the pound.
Any comments or queries by the new leader might well trigger some developments for sterling, if you have a position buying or selling pounds and Canadian dollars, you might wish to get in touch to discuss the latest news and forecasts.