The Pound has dipped slightly against the Canadian Dollar during Wednesday’s trading session as the repercussions of Monday’s late-night terror attack in Manchester continue to be felt.
However, while the incident initially had a negative effect on the Pound, it could cause long-term gains for the GBP CAD exchange rate.
General election campaigning has been suspended in the wake of the Manchester attack. But when the election battle and opinion polling resumes, the Pound could accelerate against the Canadian Dollar.
This is because, in the wake of a terrorist atrocity, voters could feel inspired by the Government’s rapid response to the incident, potentially pushing the Conservatives up in the polls.
A Conservative government is broadly considered a better one for Brexit negotiations, so a greater majority will strengthen Theresa May’s hand in this area.
If the Conservatives gain a fresh wave of support when polling resumes, the Pound could jump against the Canadian Dollar.
Future Canadian Dollar movement could come from ongoing Trans-Pacific Partnership (TPP) negotiations as Canada is a member of the group. The TPP trade deal originally included the US, but Donald Trump removed the country from the deal within days of taking office.
Despite concerns that the deal was ‘dead in the water’, major members like Japan, New Zealand and Canada have been working behind the scenes to keep the agreement intact.
It has been agreed that the TPP should be ‘re-evaluated’ in the wake of the US withdrawal, although these are still early days for restoration efforts.
A resurrected TPP hasn’t been entirely well-received in Canada, which further complicates matters for all parties involved.
In opposition to the TPP, Council of Canadians Trade Campaigner Sujata Dey has declared;
‘[The TPP is] a huge corporate power grab. These trade agreements are old-school because our world problems have changed. Until we stop copying and cutting the old trade agreement that we’ve been doing for the last 30 years, it’s not going to be a trade agreement that works for our new reality’.
If internal and international differences can be put aside for the collective good of a new TPP deal, then the Canadian Dollar may rally on news of fresh hopes for international trade.
Recent Interbank GBP CAD Exchange Rates
At the time of writing, the Pound to Canadian Dollar (GBP CAD) exchange rate was trading at 1.7506 and the Canadian Dollar to Pound (CAD GBP) exchange rate was trading at 0.5707.
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