The Pound Canadian Dollar exchange rate has dropped by around -0.4% at the end of the week, ahead of a key meeting between the UK and US leaders.
Demand for the Canadian Dollar has been weakened by falling oil prices, though this has not caused a CAD GBP decline.
GBP CAD Weakness Follows Theresa May’s Speech with Philadelphia Republicans
Today’s Pound Canadian Dollar exchange rate has shown a clear slump in the wake of comments made by Theresa May to US Republican politicians on Thursday.
May was prefacing her visit to the White House to see President Donald Trump, which will be the first such meeting between the President and a global leader.
May remarked that the UK-US ‘special relationship’ needed ‘cementing and affirming’ and additionally expressed hopes of the US supporting the UK in its trade efforts to become a ‘global Britain’.
The speech from May was met with concern by some observers, who pointed out that, in a post-Brexit world, the US stood to gain far less than the UK from such a deal, making it uncertain why Trump would be particularly desperate to agree to one.
For the Canadian Dollar, the latest advance against Sterling has come mainly due to the concerns about the US economy strengthening the CAD, given that the only Canadian news so far has seen crude oil costs dip to $53.44 per barrel.
Pound Sterling Predicted to Slump if May-Trump Talks Fail to Bear Fruit
After the dust settles from Theresa May and Donald Trump’s first meeting, investors will want to see details of a potential trade deal if the outlook for the UK economy is to improve.
If the UK is able to actually secure the promise, or at least the commitment, of a UK-US free trade deal shortly after exiting the EU, then Sterling demand is expected to rise.
On the flip side, if it turns out that the UK has fallen by the wayside in UK-US relations, then a deterioration in the GBP CAD exchange rate is likely due to further uncertainty for the post-Brexit period.
Canadian Dollar Expected to Slide if Trump Attacks NAFTA Agreement
When looking for future influencers of the Canadian Dollar Pound exchange rate, Donald Trump factors heavily into these calculations, given his ambitions with regard to the North American Free Trade Agreement (NAFTA).
The US, Mexico and Canada are all members of NAFTA, but Trump has repeatedly stated during campaigning that he wants to renegotiate the agreement so that it is more advantageous to the US.
With that in mind, NAFTA talks in the future may not go as poorly as some have predicted for Canada, given Trump’s recent falling out with the Mexican government.
As diplomatic ties between the US and Mexico are increasingly frayed by Trump’s insistence that a massive border wall be built, as well as that Mexico pays for it, the President could try to preserve his remaining bridges by easing off on any harsh renegotiations of NAFTA with the Canadian Government.
On the opposite and more probable side of the coin, however, if Trump’s trade talks with Canada echo those he has had elsewhere then Canadian Dollar demand could well plummet on fears that the Canadian economy will be getting the short end of the stick in future.
Recent Interbank GBP CAD Exchange Rates
At the time of writing, the Pound Canadian Dollar (GBP CAD) exchange rate was trending in the region of 1.64 and the Canadian Dollar Pound (CAD GBP) exchange rate was trending in the region of 0.60.
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