The Pound Canadian Dollar (GBP CAD) exchange rate is down by around half a cent today as increasing speculation over the future of Bank of England Governor Mark Carney weighed on the Pound (GBP).
Pound (GBP) Canadian Dollar (CAD) Slides
Despite advancing slightly in the first few hours of trading, the Pound has tumbled against the Canadian Dollar (CAD) today following uncertainty over Carney’s future as BoE Governor.
It is currently unclear if Carey will decide to serve his full term into 2021, or if he will step down as BoE Governor in 2018 as he originally planned when he took up the position.
Markets are spooked by the possibility that Carney may decide to leave in 2018, right in the middle of the UK’s ‘Brexit’ negotiations.
Speculation has been rife following recent criticism of Carney from members of the UK government, including from Prime Minster Theresa May, over the Bank’s decision to keep interest rates low. Meanwhile, some have also accused the government of attempting to compromise the independence of the BoE.
Canadian Dollar Bolstered By CETA Free Trade Deal
The long-delayed signing of the Comprehensive Economic and Trade Agreement (CETA) between Canada and the European Union has helped to boost the strength of the Canadian Dollar as analysts predict the deal could be worth $12billion in increased trade.
The agreement had recently been delayed as the Wallonia region in Belgium vetoed the deal, preventing CETA – which required the approval of all EU member states – from being signed.
GBP CAD Forecast: Sterling Likely to be Volatile ahead of BoE Rate Decision
The Pound to Canadian Dollar exchange rate is likely to see increased volatility in the run up to Thursday when the Bank of England (BoE) makes its next rate decision.
Sterling sentiment is likely to drop ahead of the meeting following comments from UK Chancellor Philip Hammond last week, in which he said that he would be willing to authorise additional quantitative easing if the bank requested it, increasing fears of a rate cut.
Meanwhile the ‘Loonie’ may tumble tomorrow following the release of the latest GDP figures from Canada as growth is currently forecast to slide from 0.5% to 0.2% in the month of August, signalling a slowdown in the Canadian economy.
Current Interbank Exchange Rates
At the time of writing the GBP/CAD exchange rate was trending around 1.62 and the CAD/GBP exchange rate was trending around 0.61.