Sterling has dropped by -0.4% against the Canadian Dollar today and extend losses in the build up to the June 8th election.
With six weeks left until UK voters hit the ballots for the snap general election, any surprise shifts in polling figures could cause major Pound volatility.
The current Conservative government has emphasised that it is strongly for Brexit, potentially to the point of following through with an economically turbulent ‘Hard Brexit’.
If Theresa May gains more seats after the election, then she may feel that her mandate has been assured. This could embolden the PM going into Brexit talks, which are expected to be the next item on the EU agenda after the French election concludes in May.
Canada’s long-term response to Donald Trump’s trade comments and its continued relations with the US could cause the next major Canadian Dollar movements.
US President Trump recently did a U-turn on his stance on US-Canadian trade, having previously stated that the North American Free Trade Agreement (NAFTA) would only be ‘tweaked’.
Calling out the Canadian government’s policies while launching his own ‘Buy American and Hire American’ plan, Trump declared;
‘We are…going to stand up for our dairy farmers. That demands [immediate] fair trade, with all of our trading partners [including] Canada’.
Trump elaborated on the apparent trade imbalance;
‘Canada, what they’ve done to our dairy farmworkers is a disgrace. We can’t let Canada… take advantage and do what they did to our workers and to our farmers…in lumber, timber and energy. So we’re going to have to get to the negotiating table with Canada very quickly. The fact is, NAFTA, whether it’s Mexico or Canada, is a disaster for our country. It’s a trading disaster’.
If it looks like Canadian and US trade officials are unable to reach a compromise on the clearly contentious issue, then the CAD GBP exchange rate could drop sharply.
Offering some solace to concerned traders has been Canadian Prime Minister Justin Trudeau;
‘We’re not going to overreact, we’re going to lay out the facts and we are going to have substantive conversations about how to improve the benefits for citizens on both sides of our borders’.
Recent Interbank GBP CAD Exchange Rates
At the time of writing, the Pound to Canadian Dollar (GBP CAD) exchange rate was trading at 1.72 and the Canadian Dollar to Pound (CAD GBP) exchange rate was trading at 0.57.
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