On Wednesday, the Pound opened trading against the Canadian Dollar at an interbank exchange rate of CA$ 1.7076 and closed higher around CA$ 1.7172.
This appreciation came on rising uncertainty among Canadian Dollar traders, who were worried about the impacts of what was then a predicted US Federal Reserve interest rate hike.
Pound Sterling to Canadian Dollar (GBP/CAD) Exchange Rate Dips on Limited Data
The Pound (GBP) has fallen against the Canadian Dollar (CAD) and traded narrowly against other peers today, with limited UK news compounding low confidence in the UK currency.
Brexit worries remain in the spotlight, with increased concerns about a no-deal Brexit having a limiting effect on GBP demand.
Despite the latest GBP/CAD exchange rate dip, however, the Pound is still trading near the best weekly level in the pairing.
Canadian Dollar to Pound (CAD/GBP) Exchange Rate Rises despite NAFTA Fears and Fed Rate Hike
On the other side of the pairing, the Canadian Dollar (CAD) has risen against the Pound (GBP) despite the handicap of two pieces of negative economic news.
The first is that Canada’s membership of a revised North American Free Trade Agreement (NAFTA) is still in question.
The NAFTA deal, which previously contained the US, Mexico and Canada, is being renegotiated but only features the US and Mexico at present.
US President Donald Trump has reportedly refused to meet the Canadian Prime Minister because of continued differences over trade, which heightens the risk of Canadian exclusion from the deal.
An additional factor limiting Canadian Dollar demand has been last night’s Federal Reserve interest rate decision – this resulted in the Fed hiking interest rates and boosting US Dollar demand in the process.
GBP/CAD Exchange Rate Forecast: Will Central Bank Governor Speeches Trigger Pound to Canadian Dollar Exchange Rate Volatility?
The Pound (GBP) may be able to advance against the Canadian Dollar (CAD) this afternoon, when Bank of England (BoE) Governor Mark Carney is due to give a speech.
As the head of the UK central bank, Mr Carney wields a significant amount of influence and could boost the Pound if he backs a 2019 interest rate hike.
The BoE raised rates from 0.50% to 0.75% this year and some economists are anticipating another such rate hike by the end of next year.
In the off chance that Mr Carney discusses interest rates and hints at a rate hike next year then the Pound could rise sharply against the Canadian Dollar.
Mr Carney won’t be the only central banker speaking today; Bank of Canada (BOC) Governor Stephen Poloz will also be making remarks later this evening.
If Mr Poloz indicates a desire to raise BOC interest rates in the wake of the recent Fed rate hike, Canadian Dollar demand could rise higher against the Pound.
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TAGS: Pound Canadian Dollar Forecasts