The Canadian Dollar weakened against its major currency counterparts yesterday as global tensions of an escalating trade war between the US, China and the EU continued to put pressure on the CAD. The Canadian Dollar forecast below looks into how the CAD could be impacted by this. The table below shows the range of exchange rates for the CAD for the past month, indicating your potential return when selling £200,000.00 during the high and low points of that past month.

Currency Pair% ChangeDifference on £200,000
GBP/CAD3.8%$13,070

The latest pressure came from a report released yesterday which stated that the US plan on stopping many Chinese companies from investing in the US, in particular in US technology firms, and that they also want to bar additional technology exports from going to China. As Canada export commodities such as oil, the economy could be put under increased pressure if the flow of global trade slows down.

The Canadian economy also suffered a blow at the end of last week when Retail Sales figures were released showing a large fall in April, and poorer than expected Inflation figures were reported in May.

However, the rising price of oil has helped the Canadian Dollar from falling too far against its counterparts, after the announcement on Friday of the decision by OPEC (Organisation of the Petroleum Exporting Countries) to increase the production of oil by an additional 1 million barrels per day. As oil is Canada’s largest exported product, when the cost of this rises, usually so does the value of the Canadian Dollar.

Hopes of an interest rate hike by the Bank of Canada are quickly diminishing, as the chances of a hike in July have now fallen to below 50%, from around 70% before last week’s negative data.

Bank of Canada Stephen Poloz speech – will there be an Interest Rate hike in the coming months?

Bank of Canada Stephen Poloz speech – will there be an Interest Rate hike in the coming months?

On Wednesday evening at 7pm, Bank of Canada Governor Stephen Poloz will give a speech which may help to clarify the Banks plans on raising Interest Rates this year. I would expect large swings on Canadian Dollar exchange rates at this time, as if the speech is positive and hints towards raising rates this year the Canadian Dollar should climb, but likewise if there is no mention of hiking rates, or if the Bank decide to wait and see how the global tensions fair up before making any policy changes, the Canadian Dollar could weaken significantly.  As this speech is outside of normal trading hours, a Limit Order contract could allow us to secure your currency at a level determined by you.

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.