Sterling has seen its value slip against the CAD of late, as fears over a prospective no-deal Brexit continue to put pressure on the pound.
|Currency Pair||% Change (Month)||Difference on £200,000|
With the Tory leadership race entering its final stages, both candidates have stated that unless a viable deal with the EU is in place by the revised Brexit deadline of October 31st, then they will be putting plans in place to leave the single bloc without a deal.
Whilst frontrunner Boris Johnson has always stated that he would be prepared to leave the EU without a deal if necessary, Foreign Secretary Jeremy Hunt has now also stated that unless a deal is close, he will be looking to take the UK down the same path.
This may be way of conjuring additional support amongst hard-line Conservative Brexiteers, but either way, even the prospect of a no-deal Brexit has historically proven to be a weight on sterling’s shoulders.
As a result, investors are continuing to shy away from the pound, amidst growing fear of the longer-term economic prospects for the UK.
This downturn has helped boost the CAD’s value, which has also been buoyed by a rebound in oil prices in recent weeks.
The Canadian economy has posted impressive numbers of late, including a surprise 762 million CAD trade surplus in May, a figure which astounded many considering the current uncertainty in the global markets and a slowdown in the global trade.
The Canadian economy has managed to withstand the current slowdown in the global markets, growing by a greater than expected 0.3% in April.
Canadian GDP figures are particularly impressive considering the Canadian economies historical reliance on positive global growth to prosper.
The CAD continues to out-perform the other commodity-based currencies, in a time when the current trade stand-off between the US and China, is pilling pressure on most export driven economies.
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