The Pound is rebounding versus the Canadian Dollar after falling as low as almost 1.55 during the headline making flash-crash of the Pound almost a couple of weeks ago now. Sentiment towards the Pound has certainly improved after the language surrounding the UK’s planned ‘Brexit’ has softened over the past week.
This is in stark contrast to the ‘Hard Brexit or no Brexit’ talk coming from European leaders Donald Tusk and Francois Hollande at the beginning of last week, which weighed heavily on the Pounds value as is often the case when the scope for a longer, drawn out ‘Brexit’ process is looking unlikely.
Those hoping for further Sterling strength should be aware of these sentiments if they aren’t already, as I personally believe that ‘Brexit’ sentiment will continue to be the main driver of GBP exchange rates as opposed to economic data.
With that being said it was some better than expected inflation figures last month which boosted the Pound and put the sell-off on hold, but I do think the sell-off could recommence if another ‘Hard Brexit’ headline surfaces.
The next time that Brexit could hit the headlines is tomorrow, as the governor of the Bank of England , Mark Carney will be giving a speech tomorrow at 3.30pm so those waiting for the right time to make a currency transfer involving the GBP and CAD pair should either avoid trading during this time or plan around it.
The Canadian dollar has also run into a stumping block as Canada and the EU failed to tie up a trade agreement between the pair right at the last minute. There has also been talk of monetary easing in Canada for the first time in around 3 months by the Bank of Canada which is also likely to weigh on any potential CAD upside, particularly if its implemented.