Factors Affecting The GBP/CAD Exchange Rate

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The GBP/CAD rate is highly volatile due to challenging global trade scenario. The Changing UK political scene, Brexit deal and the escalated trade wars are all influencing the rate of the exchange.

Here is a list of some factors that affect the CAD forecast against the GBP.

The interest rates policy of the Bank of Canada is one of the most important factors that influence the GBP/CAD rate. BOC has maintained the interest rates at 1.75% even though most of the federal banks.

Canadian dollar is known as Petro currency. The international prices of petroleum prices is another factor that influences the CAD forecast against GBP. The rise and fall of petroleum prices will have a major impact on the value of the CAD. Any rise in the prices of petroleum products will strengthen the price of CAD and fall in petroleum prices will weaken the CAD.

Canadian Dollar is also affected by the prevailing conditions of the global economy because Canada is a commodity based economy. A healthy and strong global economy will have a positive impact on the CAD rate whereas any challenges in the global economic situation weaken the CAD.

GBP/CAD exchange rate is set to remain volatile due to the many twists and turns in the Brexit deal. Investors are showing an increased interest in CAD as the pound is losing ground due to the fears over the Brexit strategy. While the changing political conditions in the UK are affecting the GBP negatively, the positive signals from the Canadian economy are strengthening the CAD.

Canada has reported an increase in the employment numbers and wage rate. It also reported positive growth in the automobile manufacturing. The retail numbers coming out of Canada are impressive with the consumers willing to spend. All these factors have encouraged the Bank of Canada to maintain the interest rates even as the US and other Federal banks opted for a rate cut. All these factors are contributing to the growth of the CAD rate.

Owing to the positive CAD forecast, more investors are flocking to buy the Canadian dollar, which is putting a pressure on the GBP.

 

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