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Pound Canadian Dollar Forecast: ?Brexit? Fears Cause Sterling to Nosedive
Published: 4 Oct at 2 PM Tags: Pound Sterling, Euro Exchange Rate, Dollar Exchange Rate, Currency Exchange, Canadian Dollar Exchange Rate, Euro Crisis, UK, Exchange Rates,
The Pound (GBP) to Canadian Dollar (CAD) exchange rate came close to a yearly low this morning as Sterling continues to struggle following the announcement over the weekend that Prime Minster Theresa may plans to trigger Article 50 of the Lisbon Treaty by the end of March 2017, starting two years of official ‘Brexit’ negotiations.
Pound Sterling Plummets amidst Mounting ‘Brexit’ Fears
Market sentiment towards the Pound continues to decline as fears mount over the possibility of a ‘hard Brexit’, which would see the UK government prioritise tighter immigration controls over retaining access to the EU’s single market.
The Pound was dealt another blow this morning as Bloomberg reported that British banks will not get any special treatment in ‘Brexit’ negotiations as Theresa May apparently seeks to ‘change the relationship between the government and the City of London’.
This will exacerbate fears from the London Financial sector over the loss of the City’s passporting rights that may see London lose its status as the financial centre of Europe. With the financial-services sector making up nearly 12% of the UK’s economic output, this change in stance is likely to increase pressure on the Pound.
Potential OPEC Deal Boost for Canadian Dollar (CAD)
A slight uptick in the value of oil helped the Canadian Dollar make further gains on Sterling this morning in anticipation of a potential OPEC deal.
The commodity based ‘Loonie’ is closely tied to the price of oil, which has risen sharply over the last week as reports indicated that OPEC was close to an agreement over reducing oil production in member countries.
CAD is also helped by the US election polls which currently give Hilary Clinton a five-point lead over rival Donald Trump. Clinton is seen as a stabilising influence on the US Dollar (USD), which allows traders to seek out higher risk investments such as the Canadian Dollar.
GBP CAD Forecast: ‘Brexit’ Pressure to Persist?
With even yesterday’s strong UK Manufacturing PMI data unable to curb the drop in the Pound in the face of market sentiment over ‘Brexit’ it is unlikely that Sterling will see any major gains in the near-future.
The most significant data release for the week is the Canadian Unemployment Rate report which is due Friday, although with it forecast to remain at 7% it is doubtful that it will cause much change in the GBP CAD exchange rate.
Should the OPEC deal fall through however, then the Canadian Dollar will likely tumble in parallel with a drop in oil prices, giving the Pound a small amount of respite.
Most of the week’s movement is therefore likely to be closely tied to market sentiment over ‘Brexit’ and will focus closely on comments made by UK officials on the subject.
Current Exchange Rate
At the time of writing the GBP/CAD exchange rate was trending around 1.6773 and the CAD/GBP exchange rate was trending around 0.5967.
Pound Sterling Plummets amidst Mounting ‘Brexit’ Fears
Market sentiment towards the Pound continues to decline as fears mount over the possibility of a ‘hard Brexit’, which would see the UK government prioritise tighter immigration controls over retaining access to the EU’s single market.
The Pound was dealt another blow this morning as Bloomberg reported that British banks will not get any special treatment in ‘Brexit’ negotiations as Theresa May apparently seeks to ‘change the relationship between the government and the City of London’.
This will exacerbate fears from the London Financial sector over the loss of the City’s passporting rights that may see London lose its status as the financial centre of Europe. With the financial-services sector making up nearly 12% of the UK’s economic output, this change in stance is likely to increase pressure on the Pound.
Potential OPEC Deal Boost for Canadian Dollar (CAD)
A slight uptick in the value of oil helped the Canadian Dollar make further gains on Sterling this morning in anticipation of a potential OPEC deal.
The commodity based ‘Loonie’ is closely tied to the price of oil, which has risen sharply over the last week as reports indicated that OPEC was close to an agreement over reducing oil production in member countries.
CAD is also helped by the US election polls which currently give Hilary Clinton a five-point lead over rival Donald Trump. Clinton is seen as a stabilising influence on the US Dollar (USD), which allows traders to seek out higher risk investments such as the Canadian Dollar.
GBP CAD Forecast: ‘Brexit’ Pressure to Persist?
With even yesterday’s strong UK Manufacturing PMI data unable to curb the drop in the Pound in the face of market sentiment over ‘Brexit’ it is unlikely that Sterling will see any major gains in the near-future.
The most significant data release for the week is the Canadian Unemployment Rate report which is due Friday, although with it forecast to remain at 7% it is doubtful that it will cause much change in the GBP CAD exchange rate.
Should the OPEC deal fall through however, then the Canadian Dollar will likely tumble in parallel with a drop in oil prices, giving the Pound a small amount of respite.
Most of the week’s movement is therefore likely to be closely tied to market sentiment over ‘Brexit’ and will focus closely on comments made by UK officials on the subject.
Current Exchange Rate
At the time of writing the GBP/CAD exchange rate was trending around 1.6773 and the CAD/GBP exchange rate was trending around 0.5967.
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Source: moneytransfer.co.uk