A report released by the IMF predicted that the Canadian economy would like continue to grow into 2018, which lent some support to the Loonie, causing it to gain ground against Sterling. The table below shows the difference in Canadian Dollars you could have achieved when buying £200,000.00 during the high and low points during the last month.
|Currency Pair||% Change||Difference on £200,000|
The CAD has found life tough going over recent weeks and despite a slight upturn against the Pound over recent days, its overall standing is cloaked in uncertainty at best. Investors have been shying away from the Loonie, with falling oil prices, slow progress with NAFTA talks and concerns over the global trade markets sapping investor confidence and handicapping any sustainable improvement for the CAD in recent weeks.
However, despite this relatively gloomy outlook those clients with an upcoming CAD currency exchange to execute may finally be seeing some light at the end of the tunnel.
As mentioned the CAD had actually found some support against Sterling of late, gaining almost 3 cents at the high over the past two weeks.
Gains of over a cent during yesterday’s trading helped push the CAD below 1.80 against the Pound, a level which had up until then been providing Sterling with a significant level of protection.
One of the reasons for yesterdays’ spike could be linked to a report by the IMF, which predicted the Canadian economy would still grow during 2018, just at a slightly slower pace than predicted earlier this year.
In fact the 2.1% prediction was only just under the original forecast and seemingly helps lift the cloud of uncertainty which had been hanging over the Canadian economy since the turn of the year.
Looking ahead and there are still likely to be lingering concerns by investors and as such reasons to be cautious.
Whilst President Trump’s stance has softened somewhat in recent weeks in regards to the on-going talks regarding the NAFTA deal, which are likely to be key to Canada’s economic well-being, there are still some serious concerns amongst investors in regards to the global trade wars and the negative effects this could have on the Canadian economy.
Canada is heavily reliant on global trade and any tariffs imposed by the US or countries trying to counter Trump’s measures, could seriously impact exports, in particular crude oil. Exports of crude oil have already been hit by the significant drop in prices across the globe and any further downturn in this sector could have serious ramifications for the Canadian economy and ultimately the CAD.
Looking ahead and any clients with a short-term CAD currency exchange requirement will be keeping a close eye on today’s Bank of Canada (BoC) interest rate decision and subsequent monetary policy statement.
The BoC are expected to keep rates on hold at 1.25% and with economic uncertainty around the Canadian economy at record highs, despite a more upbeat outlook by the IMF than many predicted, I would be very surprised to see a rate rise even muted under the current market conditions.
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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