Pound to Canadian dollar exchange rates tipped 1.62 at overnight on the interbank exchange, but the pound found only fleeting support above this threshold, falling back towards 1.6150 by the opening of European trading.
Boris Johnson to meet Angela Merkel in Berlin: Could the fallout of talks affect GBP/CAD rates?
Reports this morning have confirmed that UK Prime Minister Boris Johnson is heading to Berlin to meet German Chancellor Angela Merkel later today, with his primary objective to find support for a complete removal of the Irish backstop agreement.
The EU have repeatedly stated that the Irish backstop arrangement is non negotiable and as such it seems as though Johnson’s cries may well fall on deaf ears. It seems as though Johnson sees this as a key point to helping negotiations progress, but could this approach be dead in the water before Mr Johnson even touches down in Berlin later today?
There certainly seems to be a direct correlation between the pound’s devaluation over recent weeks and the threat of a no-deal Brexit growing and we could see GBP/CAD movement as news emerges of these talks.
Whilst those clients holding GBP would have been buoyed by the pound’s upturn last week, with GBP/CAD rates moving back above 1.60. Any continuation of this positive trend may well be inextricably linked to any progress the PM makes with the key Brexit sticking points, most notably the Irish backstop arrangement following the UK’s impending Brexit, which could be sealed by the 31st of October.
Bank of Canada may cut interest rates
Looking at the Canadian economy and a report in the Financial Post has suggested that an interest rate cut by the Bank of Canada (BoC) could be forthcoming. They have cited a deterioration in global demand and growing trade tensions as reasons behind the prospective rate cut and could also provide an insight as to why GBP/CAD rates spiked by over three cents from the lows earlier this month, despite the on-going Brexit tensions.
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