This report will address the factors that are likely to affect exchange rates in the short term if you are buying abroad or making a currency transfer. The table below shows the difference in Canadian Dollars you would have achieved when buying £200,000.00 during the high and low points of the past 20 days.

Currency Pair% ChangeDifference on £200,000
GBPCAD2.9%CA $3,000
Unemployment figures could bolster argument for a hike

Weak Growth figures drop CAD to near 21-week low

The Canadian dollar continued its recent fall during yesterday’s trading as Statistics Canada released their latest growth figures, posting a slight contraction of -0.1%. The release came as a great shock to the market as it went against the very positive trend of economic data coming out of Canada since the start of the year.

The pound drew further blood as a result, rising by 1.1% over the course of the afternoon, making a $200,000 transfer £1,400 cheaper. It has provided Canadian dollar buyers with an excellent window of opportunity after a long summer of dominant Loonie strength.

Slight drop in commodity prices a concern for investors

A slightly more worrying concern for CAD holders long term prospects was yesterday’s slight fall in commodity prices. The industrial product price came out at -0.3%, despite an expected 0.4% growth. This suggests a slight fall in the price of Canada’s exports, something that investors will keep monitoring closely, given the Canadian dollar is a commodity based currency. If the value of Canada’s exports fall, so will the Loonie’s value. It will be interesting to see how Bank of Canada Governor Stephen Poloz addresses the release this evening.

When should I buy Canadian dollars?

Sterling’s climb against the Loonie since last Wednesday has been relentless and it has lead a number of our clients to question holding out for further gains. The popular option however seems to be planning a trade before Friday’s Import/export and employment releases. Both have proved to be one of the back bone for the Bank of Canada to commit to 2 impressive back to back interest rate hikes over the summer. I wouldn’t be surprised to see these come out positively as expected, restoring investor confidence in the Canadian dollar and dragging back below 1.70.

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.