The British pound is trading at 1.72 against the Canadian Dollar today, up 0.13% with a YTD return of 0.24%. The open rate sat at 1.7217, the same as the pair’s previous close. The daily range should stay between 1.71 and 1.73, the 52-week range is anticipated to fluctuate between 1.65 and 1.80.
After experiencing a steep decline last week below the 1.69 support level, which was a low that was last seen at the beginning of September, the GBP has managed to rally as December progresses. Whether the GBP/CAD exchange rate will manage to recover to the 1.79 level seen in early March will be dependent on the success of coronavirus vaccines and a Brexit deal.
CAD is expected to outperform GBP moving into 2021, the currencies exchange rate is forecasted to drop as low as 1.58 according to analysts at the Royal Bank of Canada. With respect to a no-deal Brexit outcome, PoundSterling Live reported that “the downside may be slightly larger (around 4-5%), given the skew in market expectations.”
The UK’s economy has been left with “a notable fiscal hole that must be plugged” due to COVID-19, so the main focus will be on the country’s “twin fiscal and current account deficits.” On the other hand, CAD has gained strength and is expected to maintain growth moving into the new year.
With COVID-19 vaccines now becoming readily available in North America, economists say that the global economy is likely to recover in 2021; ‘risk-on’ assets such as stocks and commodity prices are forecasted to recover in the coming months, “all of which are CAD-supportive.”
By Surina Nath