GBP and CAD receive support
The pound to Canadian dollar exchange rate struggled to move much higher towards the end of last week when sterling was seeing a resurgence against a number of the major currencies. Whilst the pound found support last Thursday and Friday the Canadian dollar was also supported as investors moved towards the riskier commodity currencies including the Canadian dollar, cancelling out any gains for either currency. The fact that stock markets were climbing highlights some renewed confidence in global markets which bodes well for the Canadian dollar.
Rates for GBP to CAD are currently sitting below 1.61 on the interbank exchange and much of the direction of travel will invariably depend on Brexit developments this week
Boris Johnson to meet European counterparts at G7 meeting
UK Prime Minister Boris Johnson will be meeting his European counterparts this week for the G7 meeting in France and Brexit will no doubt be one of the main topics of conversation. Any breakthrough could result in gains for the pound although the British side has commented that it is not expecting any breakthrough in the immediate future. For the moment the British side is preparing extensively for a no deal outcome and until proper negotiations resume the pound is likely to struggle against the Canadian dollar.
British politics hampering Sterling gains
It’s not just the ongoing Brexit uncertainty which is having an impact on GBP vs CAD, it’s the current state of British politics. Boris Johnson has a majority of just one in parliament which means a general election could be seen in the not too distant future. There has been much talk in the last week that the leader of the opposition could force a vote of confidence in the Prime Minister which could result in a care taker government whilst a general election was awaited. The government of the day however seeks to take Britain out of the EU before a general election takes place which it at odds with what the opposition parties are trying to make happen. Expect a volatile few weeks ahead with the markets likely to react strongly to developments from the G7 meeting and when parliament returns from the summer recess and politics once again takes centre stage.
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