Canadian Dollar Falls as NAFTA is Not a Done Deal

The Pound has made material gains against the Canadian Dollar this week as uncertainty over NAFTA drags the Canadian Dollar lower. With the US preparing to sign an agreement with Mexico but without Canada this is creating an uncertain period for Canadian Dollar exchange rates. Rates for GBP CAD have now broken through 1.70 this morning creating a good opportunity for those clients looking buy Canadian Dollars with Pounds after what has been a torrid couple of weeks for the Pound.

The NAFTA uncertainty is clearly dragging the Canadian Dollar lower and if tensions do end up rising then the Canadian Dollar may have considerably further to fall. Unless Canada is prepared to offer concessions to the US on dairy then it would appear the US is unwilling to budge. Considering that Canada exports 75% of its total exports to the US, it leaves the Canadian Dollar heavily exposed.

The Pound meanwhile faces its own troubles as uncertainly over Brexit continues to be the main driver for Sterling exchange rates. Parliament has now resumed after the summer recess and politics will likely see considerable market reaction for the GBP CAD pair. A key event to watch will be the Conservative Party conference later this month where Brexit will dominate.

With such mixed opinions on Brexit there could be fireworks, especially if the Chequers proposal being championed by Prime Minister Theresa May is moved aside for a Canada plus type of trade deal. There is momentum for this type of arrangement to be considered and has been welcomed by the EU Chief Negotiator Michel Barnier.

For more information on Canadian Dollar exchange rates and how to make the most of any opportunities at the best rates for either buying or selling Canadian Dollars, please get in touch with me directly at [email protected].

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