GBP to CAD Exchange Rate Jumps on Trump’s Tariff Threat Against Canada

November 27, 2024 - Written by Frank Davies

STORY LINK GBP to CAD Exchange Rate Jumps on Trump’s Tariff Threat Against Canada

In comments overnight, US President-elect Trump stated that he would impose tariffs on Canada. Mexico and China on the first day of taking office in January.

The Canadian dollar posted sharp losses in global markets and the Pound to Canadian dollar exchange rate (GBP/CAD) surged.

From 3-month lows below 1.7500 posted late last week, GBPCAD jumped to 1.7720.

According to Trump. A tariff of 25% would be imposed on all Canadian shipments into the US and these would continue until Canada takes action to stop illegal migrant and drugs trafficking through the border.

Such a policy would inevitably have an important negative impact on the Canadian economy and the currency slumped in an immediate response amid fears that US trade policy on Canada would be more aggressive than expected.

There were also some hopes that the UK would not be a major target of Trump’s agenda which provided an element of Pound support.

Markets will, however, be wary over a wider slide in risk appetite with equities and commodity prices under pressure.

A slide in risk conditions would tend to undermine the Pound in global markets with volatility levels set to remain at elevated levels.

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TAGS: Pound Canadian Dollar Forecasts