It’s been a positive couple of weeks for the Canadian dollar against sterling. GBPCAD exchange rates have fallen 5 cents in the space of two weeks, making a $200,000 Canadian dollar purchase £3,450 more expensive.
|Currency Pair||% Change in 30 days||Difference on £200,000|
As highlighted in today's sterling forecast Theresa May is under severe pressure due to the Brexit negotiations. A backstop within a backstop is the main talking point between the UK and EU and this element of the negotiations has to be sorted before talks can move forward. The next key event for the UK is the budget on the 29th and investors will watch the DUP's reaction closely, as it’s the DUP that have the power to force a general election, which would be devastating for the pound.
We have also seen the Canadian dollar strengthen in the last couple of weeks.
The Bank of Canada kept to their promises and hiked interest rates this month to 1.75% from 1.5%. In addition, the Central Bank also confirmed further interest rates rises are on the horizon and we should expect to see further hikes throughout 2019.
This is good news for Canadian dollar sellers as this year has been tough for Canadian dollar sellers due to the NAFTA negotiations. For clients buying Canadian dollar short term, now may be the time to purchase.
With no data releases for Canada today, all eyes will turn to next week’s data releases. For clients converting Canadian dollars next week, the data releases to look out for on Wednesday are Industrial Product Price, RAW material price index and GDP, followed by Net Change in Employment, Unemployment Rate and Participation Rate all released on Friday. For further information on the upcoming data releases feel free to get in touch.
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