The Pound-to-Canadian-Dollar rate is likely to see further losses before the year is out, according to the latest forecasts from Scotiabank, which have been downgraded due to the unforeseen resignation of Prime Minister Theresa May which has effectively put the Brexit process on hold.
The Canadian Dollar was probing five-month has against its U.S. and UK rivals Monday but local analysts are divided over whether the Loonie can hold these lofty levels during the months ahead, with Scotiabank analysts projecting continued gains while CIBC Capital Markets looks for losses to resume in the weeks ahead.
The GBP/CAD exchange rate is trading at 1.6888 at the start of the new week, after falling over a percentage point in the previous week. Studies of the charts suggest that the exchange rate is set to continue declining over the next five days.
The Canadian Dollar extended its riposte against the U.S. Dollar and many of its G10 rivals Friday after jobs numbers for the month of May surprised on the upside for a second month running, suggesting earlier market pessimism on the Loonie's prospects may have been misplaced.
The Canadian Dollar was on its front foot against a weakened U.S. greenback Friday amid high hopes that U.S. tariffs on Mexican goods can be avoided, but the final session of the week will be an important one that could ultimatelythrow a lifeline to those who're betting the Loonie will fall to multi-year lows before the year is out.
The Pound-to-Canadian-Dollar rate is biased to weaken both from a fundamental and technical perspective, according to analysts at Scotiabank, who say the exchange rate is likely to slip beneath the five-month low set in May.
Further sideways trading in GBP/CAD is possible over coming days but we are on the alert for a bigger move lower owing to the GBP/CAD's decline during May which makes the the medium-term trend (multi-week) a negative one.
The Canadian Dollar was rescued from close to a 2019 low Friday after official data revealed a sharp pickup in economic growth at the end of the first quarter, although the Loonie still faces headwinds over the coming days and weeks due to White House trade policies.