Pound to Canadian dollar exchange rates have been falling since this start of May and I expect this trend could continue throughout July. In the last 2 months pound to Canadian dollar mid market exchange rates have dropped over 11 cents making a CAD$250,000 purchase £9,650 more expensive.
The pound has had a tough couple of months, due to the ongoing Brexit Saga. UK Prime Minster Theresa May announced her departure and the leadership contest is now whittled down to two, with Brexiteer Boris Johnson as the front runner to take over No. 10.
Even though Boris has stated he wants a deal with the EU, he also has announced that a no deal Brexit is on the table and will occur if the UK and the EU don’t reach a deal by the end of October.
Canadian dollar strength
The Canadian dollar has had a good run over the last couple of weeks. Retail sales numbers have impressed, unemployment has fallen and inflation has increased.
When the US Federal reserve are hinting at cutting interest rates, past history tells us that the Bank of Canada are normally not far behind. However if data continues to impress, I find it difficult to see why the central bank will cut interest rates therefore flows out of the US dollar and into the Canadian dollar looks likely.
Conservative leadership contest the focus for Pound exchange rates
This month the Tory leadership takes centre stage for the UK. On the 22nd July we will find out who is the Prime Minister.
With the fall in the value of sterling, it appears that the market has priced in Boris Johnson becoming the next PM. Therefore I only expect a small amount of sterling weakness if Boris becomes PM. If Jeremy Hunt takes over from Theresa May, the chances of crashing out of the EU without a deal decreases therefore the pound could improve in value.
Will the Canadian dollar go up or down against the Pound?
In regards to the Canadian dollar, the US interest rate decision at the end of the month, will be one of the main talking points, the market is pricing in an interest rate cut but it could be either 25bps or 50bps. If a cut of 50 bps occurs I expect the Canadian dollar to continue to march on against the pound.
Of course economic data from the UK and Canada also need to be considered, however I expect this will be another tough month for the pound to Canadian dollar rate. Therefore if you are buying Canadian dollars short term, considering your position now is wise.
If you have any questions about Pound to Canadian dollar exchange rates, or would like to discuss GBP/CAD exchange rates in more detail please feel to contact me directly using the form below.