Pound to Canadian dollar exchange rates have risen to 1.6183 on the interbank exchange on Monday evening trading, as concerns over global growth threaten the recent strength of the Canadian dollar. The Canadian currency had been relatively immune from recent concerns relating to the cutting of interest rates, but with the price of oil falling, the Loonie dollar is facing questions.
Brexit holding Sterling back from making gains against the Canadian Dollar
The pound is not in any major position to capitalise against the Canadian dollar, as investors eagerly await the latest news on Brexit to provide direction. Uncertainty over the outlook for the British economy, plus the direction on Brexit has seen the pound lower. The threat of no-deal Brexit is a key concern for investor and the pound, as the market wishes for certainty over the outlook on British trade with its biggest partner, the EU.
Economic news this week
This week, key news will be Canadian Inflation data on Wednesday, which might act as a cue on whether or not the Bank of Canada (BoC) will seek to cut interest rates ahead. So far, the BoC have not joined the global retreat on cutting rates but Scotiabank released a statement recently indicating the BoC might be wise to act ahead of the curve with a 50 basis points, or 0.5% cut.
Such a viewpoint could see the Loonie dollar weaker, generally speaking the prospect of a lower interest rate may see a currency weaken, as it makes that currency less attractive to hold. With concerns about trade wars and lower global growth seeing the US cut interest rates, it might be the Canadian central bank may follow suit ahead.
GBP/CAD levels are back over 1.61, almost nudging 1.62 on the interbank rate, better than the 1.5886 lows of only ten days ago. Further news for the market to monitor too, is the Jackson Hole Symposium, which might provide more insight into global trade themes, important events on the commodity driven Canadian dollar.
Thank you for reading and please get in touch to discuss or run through the market ahead this week and what options are available when buying and selling Canadian dollars.