Bank of Canada Governor Stephen Poloz is due to speak today, following the decision not to increase interest rates. Investors look to his comments on the ongoing uncertainty surrounding the NAFTA agreement. This report discusses how a lack of a renewed arrangement could affect CAD in the coming months. The table below shows the difference in Canadian Dollars you could have achieved when buying £200,000.00 during the high and low points of the past week.

Currency Pair% ChangeDifference on £200,000
GBPCAD2.33%CAD $8220

The Central Bank in Canada chose to keep rates on hold following the current uncertainty surrounding trade talks and potential changes to the NAFTA agreement. The seventh round of talks was completed yesterday and so far there has been agreements on only six chapters in seven months, there are 30 chapters in the full agreement. There is now a race against time for an initial draft as Mexico and Canada will have elections later in the year. U.S Trade Representative Robert Lighthizer suggested that they hope to have some early agreement in the next couple of months which would involve a major increase in pace.  

Can the Canadian Dollar continue its impressive run?

Stephen Poloz Speech Today

Following all the discussions with regards to NAFTA and the threats from US President Donald Trump with regards to trade tariffs, Bank of Canada Governor Stephen Poloz will speak this afternoon at 4pm and I would be surprised if it didn’t make reference to the points mentioned above. The Canadian Dollar has lost 4 cents against Sterling already since the start of March and a continuation of uncertainty with regards to tariffs is likely to have a major effect on the central bank. There was some suggestion from analysts that Canada’s economic performance in the past 6 months would have warranted a rate hike this month, following the two hikes in summer last year. However, making changes before the full picture of how Canada’s trade will look with their biggest ally does not seem wise.

Unemployment Data Tomorrow

The latest employment data will be released Friday lunchtime and is expected to stay the same as the previous month of 5.9%. Last month the rate unexpectedly fell and caused a major influx of funds into the Canadian Dollar, strengthening the currency. However since that point the Canadian Dollar has continued to weaken. In the last month a well-timed transfer purchasing £200,000 worth of Canadian Dollars would see you having achieved an extra $12,200 CAD. The uncertainty in Canada looks set to continue to weigh on the Loonie so if you do have a requirement make sure you’re in touch with your account manager to capitalise on any movements.

For more information on how future data releases could affect your currency requirement, call our trading floor on 01494 725 353 or email me here.

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Exchange rates on this page are interbank rates and indicate where the market is trading to show the performance of a currency pair. They are not indicative of the rates which we offer. The information on this web site is provided free of charge for information purposes only. It does not constitute advice to any person on any matter. Foreign Currency Direct plc. ("FCD") makes every reasonable effort to ensure that this information is accurate and complete but assumes no responsibility for and gives no warranty with regard to the same.