GBP has had a tough run of late and the downward trend seen against the EUR & USD has been mirrored against the CAD, which has seen its value spike sharply over recent weeks.
|Currency Pair||% Change (Month)||Difference on £200,000|
GBP/CAD rates are currently trading below 1.64 on the Interbank, with investors lack of risk appetite for GBP cementing its recent downturn.
Whilst a rebound in oil prices, Canada’s largest export, has helped boost theCanadian Dollar’s value but the longer-term outlook remains dovish.
The Royal Bank of Canada have cut their growth forecasts for 2020, as fears over the global markets and the current trade standoffs between the US & China, continue to dampen expectation.
The Canadian economy relies heavily on its exports, and therefore a growing global economy, so the current stagnation is likely to impact investors risk appetite in the longer-term.
Like all commodity-based currencies the CAD generally sees larger swings in its value than the USD or CHF for example.
Whilst caution over Canada’s future economic growth remains, it is currently enjoying its best run of the year against GBP.
With uncertainty over Brexit and the UK’s political stance, the unknown seems to be of more concern to investors.
Longer-term much may depend on the UK’s ability to navigate Brexit and only then will we really be able to gauge what the future for the UK economy holds.
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