Due to the global pandemic of the Corvid-19 virus at the moment, one of the key topics within the financial world, Brexit, has taken a backseat recently. Fears are mounting though regarding this matter, as the UK is expected to leave the EU at the end of the year.
There had been hopes from both the UK and the EU that negotiations would be ongoing this year, to ensure a smooth departure. The coronavirus has since taken centre stage with countires rushing to find a vaccine and implement financial aid packages to support their economices. As a consequence, Brexit negotiations have been delayed to to this ongoing virus crisis.
Despite this potential issue for the UK and the potential shock to the economy should the UK leave officially in December, the pound remains close to the top of its annual price range against the Canadian dollar. At the time of writing the pair sits at 1.7475 and flat on the day. At the highest point this year the GBPCAD exchange rate hit 1.80 and at the lowest 1.58, so those of our readers considering a GBP to CAD transfer will be getting more for their pounds than for much of the last year.
Canadian Inflation and Oil Prices Cause the Canadian Dollar Volatility
Inflation data out of Canada has hit a 50-year low according to reports released this week, although this data release did little to push CAD exchange rates lower as the news of recovery in oil prices helped to give CAD a boost. Oil prices have been in the news for the wrong reasons recently after hitting negative for the first time on record and as oil is a key export for the Canadian economy this news pushed the Canadian dollar lower at the time.
Apart from the volatile oil price and inflation hitting 5-year lows, Canada will also have to deal with a slow down in the US which is one of its main trading partners. Over 20 million jobs have been lost since the corona virus hit the US and a slowdown in the States is likely to spill over into Canada due to the close geographical locations and interconnectedness of the economies.
This morning there will be a number of releases for UK PMI’s which tend to be forward looking and cover optimism within different sectors of the economy, and feel free to get in touch if you wish to discuss this further.
If you have an upcoming currency transfer and would like to learn more, you can contact myself directly, Joseph Wright, using the form below.