The Pound Canadian Dollar exchange rate has fallen today, though both currencies remain vulnerable to turbulence in the coming year.
Wave of UK Strikes See GBP CAD Exchange Rate Slide as Christmas Approaches
The Pound’s losses against the Canadian Dollar today have come despite no direct UK data; the source of this weakness is thought to be a trio of high-profile strikes across the UK.
As well as Southern Rail and British Airways employees striking, Post Office workers have also taken to the pickets, which raises the issue of people and post not getting where needed before Christmas Day on the weekend. This news has lowered confidence in the UK’s economic state, and weakened the Pound by extension.
In Canada, the flat-lining price of crude oil has overridden a spike in gold costs, which has left the Canadian Dollar in low demand against most of its regular peers bar the softened Pound.
UK Economic Prediction: Pound Canadian Dollar Losses Likely if UK Trade Hopes are Dashed
Looking to future causes of movement for the GBP CAD exchange rate, the UK’s eventual trading relationship with the EU remains a large point of contention when it comes to predicting GBP’s performance.
While International Trade Secretary Liam Fox has recently argued that the UK could have partial single market access after Brexit, this was challenged by former Trade official Sir Andrew Cahn, who said
‘Would that be legal under the WTO (World Trade Organisation)? I doubt, even if we got away with it I don’t think the EU side would be prepared to do it – why would they allow us to cherry-pick?’
Should the issues raised by Cahn arise in the New Year, then the Pound is likely to take a sharp tumble against the Canadian Dollar for a short period at least.
Canadian Dollar Pound Exchange Rate Forecast: Trump Pressures on CA Business could Dampen CAD Demand
One major factor that could damage the Canadian Dollar Pound exchange rate will come in late January, on the 20th to be precise.
This is the day that President-Elect Donald Trump becomes President, and could see the divisive figure lay down a large number of business plans on his very first day.
Among these may be previously mentioned schemes to cut corporation tax in order to raise US competitiveness, which are predicted to have a negative impact on Canadian business investment as a result.
Over the longer-term of Trump’s rule, any signs that the US is gaining a business edge against Canada are likely to limit CAD demand considerably, unless the Canadian Government makes proposals to bring the two nations back in line.
Recent Interbank Exchange Rates
At the time of writing, the Pound Canadian Dollar (GBP CAD) exchange rate was trending in the region of 1.66 and the Canadian Dollar Pound (CAD GBP) exchange rate was trending in the region of 0.60.
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