Brexit extension agreed
Sterling remains fragile due to the lack of clarity surrounding Brexit. We are now looking at a “flextension” until 31st January, but if a deal can be secured it can be done so before the 31st January.
Boris Johnson’s deal came close to approval, but he has now had to pull the deal off the table in order to push forward with a general election. This does not mean that the majority of the deal would not come back to the table at a later date. It has only been pulled to keep the SNP and Labour party happy, one of their requests to go ahead with an election.
Historically a general election will weaken the currency in question, but on this occasion the markets could well be dictated by the election favourite’s stance on Brexit.
If you have to move short term on GBP/CAD it may be wise to take advantage of current levels as there is certainly the possibility of volatility in the coming months. You may wish to keep an eye on whether Johnson will get his way this evening and get the approval he needs to go ahead with an election. If it is the case an election is going to go ahead, we could see Sterling weakness.
Bank of Canada interest rate decision tomorrow
Tomorrow we will see the Bank of Canada interest rate decision. There is expected to be no change, but the press conference following the decision could give hints to future monetary policy. This has the potential to cause volatility on the market.
During unpredictable times you may wish to be in contact with a currency specialist who can provide the latest currency updates. Foreign Currency Direct PLC has specialised in foreign exchange for over 19yrs and we are authorised as an e-money institution by the FCA. If you already use a provider, I can perform a comparison within minutes, to give you an indication of the potential saving you could make by using Foreign Currency Direct for your international currency transfers.