Over the last 24 hours the price of buying the CAD has jumped significantly with swings of excess of 2 cents. The reason for these movements have been down to a mix of the US FED rate hike earlier this week but also the price of oil. Oil has been very changeable this week reaching new recent highs of $57 per barrel as the amount of production has been cut.
Recently there have been two developments which have impacted the cost of oil. Firstly, over last weekend, an agreement between non-OPEC members was made to cut production. The group of 13 countries, including Russia, accounted a cut of 558,000 barrels per day. Saudi Arabia also this week confirm that they too would cut supply in January by more than they had agreed a week before at the OPEC meeting. As a result of this almost global cut in production the price of oil has gushed up and as Canada is a net exporter of oil their currency has also benefited. Over this period of volatility timing a transfer wisely buying CAD $200,000 would have saved you in excess of £2,500.
Yesterday we also had a financial statement and update from the Bank of Canada (BOC). They highlighted again their growing problems domestically, that being the amount of household debt and the housing market imbalance. Rising debt and strong house price growth continues to show correlations in a similar way as here in the UK. These comments where widely expected and indeed overshadowed by the oil prices this week in driving currency markets and values. The GBPCAD rate is now near the lowest level we have seen in 6 years if you ignore a two week period in October.
Later today we have the latest updates on foreign investments into Canada and is a great indicator into the well being of the Canadian economy. This is expected to show an fall this afternoon at 13:30 and could well provide a welcome break in what has been a fairly negative trend for GBP/CAD over the last 3 weeks.
The price of oil could be set for further falls which could weaken the Canadian Dollar. Clients with a CAD requirement may benefit from speaking with their broker sooner rather than later. Call today on 01494 725 353 or email me at firstname.lastname@example.org.