GBP/CAD directed by Brexit developments
The Pound to Canadian dollar exchange rate is predominantly being dictated by Brexit. At present the situation does not bode well for the pound. Boris has dismissed members of parliament from mid September until late October in an attempt to foil any move to prevent a no deal.
Brussels stance seems to remain the same and as yet there have been no concessions made on the Irish border. Generally speaking, you would expect the higher the probability of a no deal the weaker you would expect sterling to become. It looks as though a deal will not be forthcoming and at the moment the UK is headed for a no deal scenario. There is also the possibility of a general election. Historically a general election will weaken the currency in question. Sterling fell heavily in value in the build up to the 2010 general election for example.
Canadian dollar releases impressive economic data: Could this continue ahead of the Bank of Canada interest rate decision?
The Canadian dollar has fared well of late with some impressive data despite less than optimistic global economic forecasts. The Bank of Canada (BOC) however may have a more dovish stance at the next interest rate decision to prepare against any impact caused by Trump’s trade wars and other macro-economic problems from elsewhere.
If the monetary policy outlook is seen to be less aggressive, we could see some Canadian dollar weakness, although Brexit problems may outweigh any problems from the Canadian economy.
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