Even with the Brexit uncertainty hanging over the head of the pound, we have seen a modest improvement in sterling against the Canadian dollar since August 2018.
This certainly has not been without its setbacks for those looking to buy Canadian dollars, as there have been a few occasions where a ‘no deal’ Brexit has weakened the pound and movements in interest rates or the price of oil have impacted the Canadian dollar.
|Currency Pair||% Change in 1 month||Difference on £200,000|
Looking forward for this pairing and I personally feel that as long as there are no Brexit related banana skins that knock the pound, there could be further improvement for sterling against the Canadian dollar over the course of the trading year.
One factor to take into account when it comes to the Canadian dollar is that there is a fairly heavy reliance on exports. At present in Canada, there is fairly weak productivity which means that Canada is starting to become a higher cost producer than its close neighbours in the U.S. This is starting to weigh on the Canadian economy.
An economic slowdown in Canada would most likely lead to the Bank of Canada (BoC) having to pause any thought of interest rate hikes and to possibly have to consider lowering rates later in the year to weaken the Canadian dollar and give exports a better chance of improving Canadian growth.
Like many other economies around the world, high household debt is a concern for Canada and with this rising, the expectation is for domestic spending to slightly decline this year.
With all of the above taken into account I would not be surprised to see GBP/CAD exchange rates head towards the 1.80 mark again in the near future.
There's not much in the way of economic data from Canada today, however Employment change figures and a speech by BOC Governor Poloz are most likely to impact Canadian Dollar exchange rates over the course of trading tomorrow.
The most notable Canadian economic data this week will be Retail Sales figures; expectations are for a drop in Retail Sales which may lead to Canadian dollar weakness to round off the trading week.
If you have Canadian dollars to buy or sell, yet do not have time to watch the markets all day, it may be prudent to register with us and let us do it for you. Feel free to contact us today on 01494 725 353 and we will run you through the quick and simple process of setting up a rate alert and many other handy market tools.
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