After Stephen Poloz, Governor of the Bank of Canada hinting that interest rates are unlikely to be raised in 2018 which caused the Canadian Dollar to weaken. 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
GBPAUD-0.60%CAD 2150.56
Weakening commodity prices push CAD lower

Interest rate hike from the Bank of Canada unlikely in the short-term

Canadian Dollars bulls were left disappointed yesterday after comments from Bank of Canada governor Stephen Poloz dampened investors’ hopes of a rate hike.

With the Canadian Inflation level sitting at over a three-year high, investors had hoped that governor Poloz might allude to raising interest rates in the short-term future.

These hopes were dampened yesterday when he confirmed that he expects the inflation rate to remain above 2% in 2018, but he’s comfortable with this providing that the longer-term trend remains steady.

These comments pushed the GBP/CAD rate within touching distance of 1.80, which is just a few cents from its annual high.

Should the BoE carry out the expected 1-2 rate hikes this year and the BoC continue to take a tentative path, I wouldn’t be surprised to see the GBP/CAD rate exceed its current annual high of 1.85. Although both Brexit and Nafta talks may have a greater effect on the pair than monetary policy as the year goes continues.

Governor Poloz to speak again later this week

The governor of the BoC, Stephen Poloz will be speaking again this week on Wednesday night. Now that he’s shared his views on Canada’s high inflation level I’m not expecting to see CAD exchange rates move as much as they did yesterday, but those with a CAD currency requirement should still remain vigilant.

There are no other major economic data releases due out of Canada this week, but next week there will be data releases covering the health of the imports and exports industry in Canada. These releases carry the potential to move markets due to the economy being heavily driven by these business sectors.

Feel free to get in touch if you wish to plan a currency exchange involving CAD. There are trade contracts that can help those of our clients that wish to be able to trade outside of our core hours, and I’ll be happy to discuss these in further detail should you wish.

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.