The GBPCAD rate has recently risen presenting some excellent short term opportunities to buy the CAD. This has occurred completely against the grain of expectation as the sinking pound does appear to be on course for further losses. All in all I would not be gambling on GBPCAD rising much higher but the recent switch of sentiment, partly as the price of Oil falls is presenting a much better opportunity.
All in all the Canadian economy is performing well and they have raised interest rates over there in line with their major trading partner the United States. With US GDP having risen yesterday the future is looking positive overall for the Canadian economy. Canada is on a path to raising further their interest rate, what central bank policymakers will call ‘normalisation’. After years of low interest rates and loose monetary policy globally policymakers are gently returning to normal levels of interest rates.
Normalisation is not something that can really be associated with the UK as the last move on interest rates was down. The expectation for the future is a worsening economic condition for the UK, things are not going to be ‘normal’ anytime soon this side of the Atlantic. With no deal on Brexit forecast until a year at the earliest we might see the pound test the lows on GBPCAD of 1.52 from 2013.
If you are holding pounds and buying any currency life will be difficult but tracking the better levels is the best way forward. I think buying on the current spike makes real sense for any clients who need to buy the Loonie this side of Christmas.
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