Interbank exchange rates for pound Sterling to Canadian dollars have been falling recently and now sit close to a month low, largely on concerns over Brexit as we enter the last 7 days before the UK is scheduled to leave.
Brexit concerns have been heavily contributing to the fall in the value of the pound recently but what is worth noting is that if you dont' take into account the last 30 days when GBPCAD rates have been higher, levels are over a year high.
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Generally the Canadian dollar has been weakening recently, which really seemed to come in when they were forced to re-negotiate the trade agreement with their largest trading partner the US. Since then domestic growth data has been sluggish, the economy is still growing but at a slower pace than predicted. Like all commodity based currencies the CAD has been feeling the effects of global trade slowdown.
Oil is one of Canada’s largest exports and this has also been adding to the CAD's fall in value. Oil has been dropping as a result of concerns about global growth hemmed from the US-China trade talk’s rumbling on. As a large contributor to the economy, and with its price falling the value of the Cad has been falling.
On Tuesday the Canadian Prime Minister Justin Trudeau’s announced their latest budget. Bloomberg have commented that it was perhaps a little more generous as the PM positions himself for re-election. The fiscal deficit is now forecasted to be $9.8bn in 2019-2020, the largest on record. The budget also included spending measures that could lift its GDP which was seen as positive and strengthened the CAD on the day making it more expensive to buy.
Later today we have a number of data releases coming from Canada which could impact its value, this includes Retail Figures and Consumer data. Rate figures have the potential for some movement in the value of CAD as it is expected to show an expansion from the -0.1% seen in January.
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