CAD rallied against the Pound last week but falls in Brent oil prices appear to have weakened the Loonie in recent days.
Sterling fell against a majority of its counterparts during yesterday’s trading, with the Canadian Dollar being one of the only exceptions. The Loonie had been rising against the Pound during last week’s trading, with the price of oil steadily rising, but yesterday was the third straight day of losses for Brent Crude Oil, with prices falling below $50 per barrel. This fall in prices saw the CAD weaken by as much as 1% against Sterling, despite the on-going referendum which has been a huge drag on the value of the Pound. This kind of volatility highlights how crucial the timing of a trade can be, as a well-timed purchase of $200,000 during yesterday’s trading could have been as much as £1,400 cheaper.
Canada is one of the largest exporters of Brent Crude, and the value of the Canadian Dollar is therefore heavily impacted by swings in oil prices. If you have an upcoming CAD purchase to make, moving on this spike may be a sensible option. As we approach June 23rd, I think there is a chance we could see the Pound weaken dramatically, with further falls likely if there is a vote to leave the EU next Thursday.
Late tomorrow evening there is a speech from Bank of Canada Governor Stephen Poloz and this is likely to create volatility for the CAD. Furthermore, on Friday afternoon, consumer price index figures for May are released. These are expected to show a fall, with Stephen Poloz claiming last week that the state of the economy is looking ‘bleak’. With potential weakness for both the Pound and Canadian Dollar over the next 9 days in the lead up to the referendum, we could be set for a volatile period, so keeping in touch with your account manager here will help you keep informed of all the latest market movements.
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