Lawrence Schembri, the deputy Governor of the Bank of Canada is due to speak this afternoon ahead of retail sales figures and inflation data due on Friday. This data has the potential to cause some volatility in GBP/CAD exchange rates. The report below discusses why this data is likely to affect rates, taking into account the lack of positive data for the Pound at present. The table below shows the difference in Canadian Dollars you could have achieved when buying £200,000.00 during the high and low points during the past 4 weeks.

Currency Pair% ChangeDifference on £200,000
GBPCAD3.3%CAD $12,000

Will the CAD’s gradual rise continue?

Ever since the Bank of England decided to keep interest rates on hold last week, Sterling has really struggled to regain any kind of momentum, even against the riskier commodity-based currencies like the Canadian Dollar where it remains marooned under the 1.74 mark. It feels to me that the Pound’s value is now very much at the mercy of investors who will likely shift their sterling positions as and when data from opposing currencies show a more favourable outlook.

This view might be reflected on the GBP CAD pairing, with very little coming out from Canada so far this week to shake the rates up, Sterling has remained range bound.

The issues inside the UK have been well documented throughout this report, with UK Prime Minster Theresa May coming under increasing pressure once again. With both the EU and members of her own Conservative party openly questioning the viability of her Brexit strategy, market confidence in the UK has dropped once again, with the Pound finding little support this week. Investors risk appetite for the Pound has dipped again following last week’s spike and it is likely that the current air of uncertainty surrounding the Brexit saga, will continue to handicap any major advances for Sterling. How it will react against the CAD is difficult to predict, with the Canadian economy facing difficulties of its own. With Canada yet to agree on a NAFTA deal with the US, who have taken the unprecedented steps of negotiating a sperate arrangement with Mexico, any long-term failure to do so could have serious detrimental effects for the Canadian economy.

The second half of this week however does promise volatility with probably far more downside risk for Sterling holders.

It all kicks off with Deputy governor of the bank of Canada Lawrence Schembri who is due to speak at 4pm this afternoon and the markets are expecting him to set the tone before the key retail sales figures coupled with Inflation levels due on Friday. Despite the shaky track record of the 2 towards the end of last year, the recent trend has been particularly positive which has buoyed investor confidence, helping the Canadian Dollar to capitalise on Sterling’s recent fall from grace since the start of the month. I would imagine the markets will be holding out for similar results to close this week and should these releases continue to outperform expectations I feel there is more chance GBPCAD rates will edge closer to the 1.70 mark than spring back towards the 1.75s.

When to Buy Canadian Dollars with Pounds?

With Brexit pressures beginning to mount UK side, it may be a bit too ambitious to hold out for long term sterling gains. Whilst the pound sits so unfavourably with the markets, those looking to buy Canadian dollars may be wise to try and plan around the next potential short-term opportunities.

Last week the Canadian dollar took a slight hit as domestic data showed a slowdown in new jobs created. I wouldn’t be surprised to see a similar story in tomorrow’s release in employment levels then, potentially offering those looking to buy Canadian dollars with a brief spike to capitalise on.

For more information on how future data releases could affect your currency requirement, call our trading floor on 01494 725 353 or email me here.

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Exchange rates on this page are interbank rates and indicate where the market is trading to show the performance of a currency pair. They are not indicative of the rates which we offer. The information on this web site is provided free of charge for information purposes only. It does not constitute advice to any person on any matter. Foreign Currency Direct plc. ("FCD") makes every reasonable effort to ensure that this information is accurate and complete but assumes no responsibility for and gives no warranty with regard to the same.