Mixed news for Sterling vs the Canadian Dollar

After breaking through 1.70 recently the pound vs the Canadian dollar has started to weaken again ahead of the news that the the US will be imposing up to US$200bn on Chinese goods coming in to the US.

The Canadian dollar has improved as it means that US money will likely to be spent on Canadian exports and therefore this is whey we have seen the Canadian dollar improve against sterling during the early part of this week so far.

It could be argued that global growth could be impacted by Donald Trump’s plans to increase tariffs and this would typically weaken the CAD but Trump has also suggested that he may be looking to revamp the North American Free Trade Agreement (NAFTA).

The latest from Brexit also remains uncertain and while this carries on I think we could see further problems ahead for the pound vs the Canadian dollar going forward. At the moment it is not clear whether we’re headed for a deal or a no-deal Brexit and this is causing investors to bypass the UK and therefore sterling causing the pound to fall.

We could be in for a rather volatile day tomorrow when the UK announces its latest inflation data for August. Inflation is a key barometer for the health of the economy and depending on how it comes out we could see a lot of movement early morning, as this will provide the Bank of England some evidence as to whether or not they’ll look to increase interest rates over the next few months.

On Friday, the focus will turn back towards the Canadian economy with the release of inflation data, and as with the UK this is likely to affect future Bano of Canada monetary policy.

For more information on how President Trump’s trade tariffs are likely to impact stering exchange rates, feel free to get in touch and ask a question using the form below. I’ll be happy to get in touch personally and assist you.

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