Pound to Canadian dollar rates soared to 1.6790 on the interbank rate, touching a 4-month high for buying Canadian dollars with pounds last week. Developments in the political situation relating to the UK’s potential exit from the EU has influenced sentiment, with the pound rising sharply on expectations of a deal.
Volatility expected this week for GBP/CAD exchange rates
GBP/EUR exchange rate may face some interest this week as we may see increasing developments on Brexit. We have the much anticipated EU Summit on Thursday and Friday and the pound to Loonie dollar exchange rate may encounter some volatility as the market reacts to the latest developments.
Sterling has risen on expectations of a deal to be reached but the details have not so far been released. Reports that the UK and EU could now be in the ‘tunnel’ of final negotiations helped the pound to find support.
What we have learned from previous developments is that the pound can be very sensitive to the latest news, and the recent optimism for sterling might well fade should the latest reported developments prove to be a false dawn.
UK economic data this week
Looking to the rest of the week, sterling could draw some influence from the latest UK Unemployment data on Tuesday and Wednesday the latest Inflation data. Wednesday is the latest Inflation data for Canada too, which could prove informative in setting expectations for possible future interest rate cuts or not.
US China trade war
The Canadian dollar may also find the latest developments on the Trade Wars provides news for the market to digest, as investors seek to gauge the possible future impact on the Canadian economy.
With Trump and China reportedly also seeking to close a deal, this could prove a factor which on previous history would help the Canadian dollar to rise. The unfolding of such news may therefore be another factor to consider for GBP/CAD exchange rates this week.
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