This Canadian report will examine the factors that could affect exchange rates this week in order to help you stay informed if you need to make a currency transfer. The table below shows the difference of CAD you would have received when buying £200,000 at the high compared to the low yesterday.
|Currency Pair||% Change||Difference on £200,000|
Yesterday presented some much needed respite for clients looking to buy Canadian dollars with Pounds. The dip in the Loonie's value was due to oil prices falling to a near 7 month low yesterday and 10 day low on Wednesday. The price of Oil is a major variable for the price of the Canadian dollar as it is one of the Canadian economy’s biggest exports. Currently, there are concerns that there is more supply than there is for demand for oil across the globe. Personally I think that any clients buying Canadian dollars with pounds should want to take advantage of this. The political outlook for the UK is still weighing on the value of Sterling with little support for the Pounds value to increase. Therefore, news such as this which can provide short term weakness should be grabbed at with both hands by clients holding Sterling.
There has been speculation of late that the Bank of Canada may look at raising interest rates in July’s meeting. Recent economic releases such as yesterday’s retail sales will help to strengthen the BoC’s case for an imminent interest rate hike. The consumer shrugged of fears of a slowdown last month as retails sales excluding the sales of vehicles jumped from -0.1% to 1.5%. Whilst a rebound from the poor figure was expected, the jump massively exceeded expectations. Today, consumer price index (inflation) data is released and if better than expected could provide further scope for the Bank of Canada to raise interest rates at their next meeting.
An interest rate hike normally strengthens the currency in question, therefore I would suggest any clients buying the Canadian dollar to do so whilst the Oil production issues causes Canadian dollar weakness. The outlook for the UK at present is bleak and combined with the scope for a Canadian Interest Rate Hike, CAD buyers could find themselves in an unfavourable position.
Thank you for reading my Canadian Dollar report, if you have any questions about exchange rates I would be more than happy to discuss them – you can contact me with any queries here.
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