Best time in 2018 to buy Pounds with Loonie Dollars?
GBPCAD touches 2018 lows
It is currently very close to the best time to buy Pounds with Canadian Dollars in 2018. A stronger Canadian Dollar on a rising Oil price and stronger US Dollar and economy, has made some big gains against a much weaker Pound, Sterling of course struggling on no-deal Brexit fears.
GBPCAD is now 8.5% lower against Sterling compared to the highs of 1.8348 reached in March. A 500,000 CAD exchange back into Sterling will now buy you an extra £23,348 compared to just 5 months ago, a fantastic opportunity for any clients holding funds in Canadian Dollars looking for a good opportunity to repatriate funds to the UK.
Expectations are that this level may well improve further with Sterling seeming highly likely to continue to struggle as markets brace themselves for more uncertainty over Brexit. This issue is clearly the biggest driver on the pound with even an interest rate rise last week failing to spark any significant interest in the UK currency.
What news this week?
Important UK news for the rest of the week comes in the form of Industrial and Manufacturing data today and then, Gross Domestic Product (GDP) data, released Friday. On the Canadian side we have Unemployment data released on Friday which could present some short term volatility, overall the Unemployment rate in Canada is expected to have decreased which might further help the Loonie.
With rising Oil prices and a strong US economy, plus the prospect of further Canadian interest rate hikes looming, the Canadian Dollar looks set to retain strength and possibly drive further against the battered Pound.
Will GBPCAD get back above 1.70?
Only some positive news on Brexit can really save Sterling and with MP’s on a summer recess until 4th September, the chance of anything in the short term seems low. Of course, when they do return there are no guarantees it would be positive news, some might say much of the confusion and uncertainty is down to the politicians themselves.
GBPCAD rates might find some support in the mid 1.60’s but could now gently drift lower as the rest of this week’s data confirms the general direction. With the rate so good for Canadian Dollar sellers, and concerning for Canadian Dollar buyers with Pounds, now is a good time to be reviewing any Canadian Dollar exposure.
For more information please do contact me, Jonathan Watson on [email protected]. I’ll be happy to discuss any questions you have.
The post Best time in 2018 to buy Pounds with Loonie Dollars? appeared first on Pound Sterling Forecast.
Source: https://www.poundsterlingforecast.com/2018/08/best-time-in-2018-to-buy-pounds-with-loonie-dollars/
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