Last week’s broad-based Pound strength saw the GBP CAD exchange rate climb by around 3 cents before the weekend, but Sterling has since reversed some of these gains.
As a historic week for the US began and risk appetite improved on the back of the latest Clinton-related news, the Pound Canadian Dollar exchange rate recorded losses.
Pound Falls Vs Canadian Dollar as Article 50 Rally Fades
The jump in the GBP CAD exchange rate recorded last week followed the High Court ruling that Government does not have the authority to trigger Article 50 on its own. The alternative (pending a Supreme Court appeal) is for Parliament to hold a vote on the decision.
Crucially, however, whether the vote will have an impact on the timeframe applied to Article 50 or the direction Brexit negotiations will take remains to be seen.
Pound losses have since been registered thanks to the latest surge in demand for the US Dollar and a mixed UK Halifax house price index result for October.
Canadian Dollar Surges as Odds of Clinton Victory Rise
The Canadian Dollar has made significant positive progress during trading today, with a rise to 0.60 being seen against the Pound.
The Canadian currency has received a major boost recently from the US, where the odds of Hillary Clinton winning the election this week have risen once again.
While not all Canadians have opposed a Trump presidency, Canada-US Relations Analyst and John Hopkins University Professor Chris Sands had stated that Trump would make things ‘very difficult’ for Canada when trading.
Sands has predicted that a more US-focused leadership in the Oval Office could lead to trade with Canada drying up, which would force manufacturers to move to the US ‘just to avoid a potential trade shock’.
In commodities news, while the cost of gold has plummeted recently, the cost of crude oil has seen another CAD-supporting rise.
GBP/CAD Exchange Rate Forecast
This week, much of the movement seen in the Pound Sterling/Canadian Dollar exchange rate will be down to the US election result.
However, there are also domestic reports with the potential to inspire GBP CAD shifts. From the UK, Tuesday will bring industrial and manufacturing stats for September, while Wednesday will see the nation’s trade balance announced.
From Canada, Tuesday’s October housing starts and Friday’s speech from the Governor of the Bank of Canada Governor (BOC) are likely to trigger movement.
Positive UK news could lend the Pound a hand edging higher against the Canadian Dollar.
But crucially, if Trump wins the election the US and Canadian Dollars may crash, aiding the Pound, while a Clinton victory would likely trigger the opposite result.