In light of the recent fall in GBP>CAD exchange rate, several members have been asking me questions about the next 12 months. With this in mind, I thought it would be useful to create a post with current analysis and some forecasts from the banks.

The Pound is under a lot of pressure at the moment. Most of this weakness is the market adjusting itself now that it is clear that the UK will not be raising interest rates any time soon. Originally it had been thought that UK interest rate may climb at the end of this year, but it now looks like this will not happen until at least the second half of next year.

As a result, investors have been pulling out of the Pound, and this sell-off has been amplified with the recent poor economic announcements from the UK. Recent comments from Cameron stating "economy warning lights are flashing" does not help either....

The crash in the price of oil, so far, seems to have been ignored in the GBPCAD pricing, however if the oil price does not stabilise and the Russia/Ukraine conflict becomes more aggravated then this could begin to influence the rates.

So where will the rates go?

I have been advising clients to look out for GBPCAD at 1.7650. It seems that there could be resistance around this level as this was the low earlier in the year (September). Should we see a break below this level then we could see a much bigger move down. It is worth remembering rates last year were in the 1.52’s. However, at the moment it seems the pricing is holding firm but this week could be very important with UK and Canada inflation figures set for release.

The banks seem very mixed in their forecasts. The latest 2015 forecasts from some of the major banks are below:

Credit Agricole: 1.69
Credit Suisse: 1.79
Lloyds Bank: 1.76
Bank of America Merrill Lynch: 1.80
Barclays: 1.82

I hope this information helps with any budgeting / currency transfers that you are considering.

Chris Canning.

Good sound advice

Thank you

I got 53p for every dollar when I sent a money gram from Canada to UK at Western Union last week

Hi Magnumpi,

Moneygram / Westernunion are convenient ways of sending small amounts of money/cash. If you received 53p for every dollar, the rate you received would be about 1.88ish.

You may have been able to get near 1.80 (which is 55.5p per dollar) by using a specialist currency provider. The difference is negligible, but if you were sending any more than $1k / $2k then it could be worth considering for next time.

It wasn't long ago that people on this forum were adamant it would be up to $2 by the end of the year haha

Thanks, that's what I thought, I only sent $300.

I'm going back for a visit in the middle of December, hopefully get a decent rate when I transfer money into my UK account to use!

Why the middle and no Christmas and New Year? I'm going back over the festive period, can't wait!

Mums birthday is in the middle of December and the girlfriends parents want us for Xmas in Calgary!

Xmas/New Year don't really bother me too much these days so I plan things based on the flight prices haha