GBP has struggled to maintain form and retain gains against the CAD, following the steep decline experienced at the end of Q1 this year.
The pairing has failed to remain far above 1.70 and current mid-market levels are around 2 cents from what has been arguably a support of 1.66. This sharp volatility over the best part of 4 months has meant that the timing of transfers has been key in order to secure a favourable position.
In the last month alone, the pairing has seen movement of over 3%, which in monetary terms has meant that well timed transfers at the highest points could have achieved approximately $10,000 more on a £200,000, in comparison to the lowest.
|Currency Pair||% Change in 1 month||Difference on £200,000|
The main drivers of this movement have largely been linked to the Central Bank of Canada’s decisions to regularly hike interest rates this year in response to rising inflation, in conjunction with the pressures GBP has been under, due to ongoing Brexit uncertainty.
It's also important to consider that a key influence in CAD strength is the price of crude oil, as this accounts for approximately 10% of the countries total Gross Domestic Product (GDP) and despite the slight decline in the price of the commodity in the short term, the CAD has benefitted from the general rise this year. There are no major economic data releases due before the weekend, however investor attention will now be turning to Inflation and retail sales data next week, as this will likely influence whether there will be a further hike to interest rates at the start of next year.
With the GBP/CAD pairing experiencing such volatility, clients with an upcoming transfer should stay in touch with their account manager, in order to plan around important economic releases to help manager their exposure to the live market.
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