So far this week, following the political uncertainty from the UK and Theresa May’s Brexit stalemate over the Irish border issue, we have seen the pound struggle against the CAD, losing as much as 1.2% in value. In monetary terms that is the difference of $3,600 on a transfer of £200,000 in to CAD.
|Currency Pair||% Change in 30 days||Difference on £200,000|
Today is a key date for CAD exchange rates, with the latest Bank of Canada Interest rate decision released later on this afternoon. After the recent renewal of the NAFTA agreement with the US, jobless rates at near historic lows and consumer spending on the up, the Canadian economy is performing extremely well and the CAD is benefitting from this too. The Bank of Canada has been on a steady path of interest rate hikes since the summer of last year when rates were first hiked from their record lows of 0.5% and it is predicted that rates will rise to 1.75% this afternoon. The rise in rates is expected to help the BoC reach their target of 2% inflation for 2019, and follows strong GDP numbers so far in 2018.
We have already seen the Canadian dollar strengthening against the pound this week with the political uncertainty surrounding Brexit, and if a hike is realised today then we could see further opportunities for CAD sellers.
In addition to this there is the expectation that there could be two further hikes in the first half of 2019 if the economy continues to move at its current pace, which could see further strength in the CAD.
There is a press conference to follow the official announcement this afternoon so any mention of this could create further movement on GBP/CAD rates. If you have an upcoming CAD requirement make sure to stay in touch with your broker here throughout this afternoon, they can help keep you up to speed with all the latest news and the impact on the markets. As highlighted earlier, even a small movement in rates could have a big impact on a sizeable currency transfer.
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