The Canadian Dollar strengthened against the Pound and US Dollar yesterday, continuing its positive gains made since Wednesday. The below CAD report looks into increasing likelihood of an interest rate hike from the Bank of Canada. The table below shows the range of GBPCAD exchange rates during the past month and the difference in returns you could have achieved when selling £200,000.00 during the high and low points of trading.
|Currency Pair||% Change||Difference on £200,000|
Bank of Canada (BoC) Governor Stephen Poloz had provided positive commentary on the health of the economy, signalling a greater chance of a hike in interest rates at the Banks policy meeting next week, and helped to boost the CAD’s value and investor’s hopes alike.
Another reason for the recent CAD strength is that the price of oil is holding strong at close to the highest level in 3 and a half years, which is significant due to this being one of Canada’s largest exports. Oil prices are currently priced just under $74 per barrel, and economists are predicting that oil prices may remain high due to supply issues.
This afternoon from 12.30pm, we will see a flurry of Canadian economic data set to impact CAD exchange rates and would be worth keeping an eye on for any clients with CAD exchange requirements. The key release of note will be Unemployment figures as this is one area in which the Bank of Canada focus on when setting interest rates.
If these figures are released better than the previous rate of 5.8%, this could give the BoC more scope to raising Interest Rates at their meeting on Wednesday, and the CAD would more than likely strengthen in expectation of this happening.
On Monday, Housing Starts data will be released at 12.15pm giving an insight into the health of the Construction Sector and housing market. However as mentioned the main event will take place on Wednesday when the BoC will meet to decide whether or not to raise Interest Rates, but equally as importantly the Monetary Policy Report and Policy Statement will be released. If rates aren’t hiked at this meeting, however commentary following this is positive and signals towards a hike in the near future, the CAD could still strengthen significantly against its major counterparts.
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.