Getting the best exchange rate can be achieved by understanding what is driving rates and the service of a specialist currency broker. Below are movements for yesterday affecting Canadian Dollar rates when buying £200,000:
|Currency Pair||% Change||Difference on £200,000|
The Canadian dollar is another currency that has been impacted by the recent escalation of words between the US and North Korea. The price of oil has been falling as a result of the crisis on the Korean peninsula as global uncertainty is factored in.
Oil prices fell 2.5% on Monday which was exacerbated by weaker data from China. Any fall in the price of oil is generally seen as negative for the Canadian dollar considering it is a major exporter.
As things stand there is a growing sense of calm over Korea. The avoidance of military action would be welcome news for the Canadian dollar and could see the dollar strengthen.
Today commences the re-negotiations for the North American Free Trade Agreement (NAFTA) between the US, Canada and Mexico which was a key component of President Trumps election campaign to put “America first”. The Canadian dollar is likely to see considerable volatility on any developments considering the kind of market reaction that was seen when the US imposed trade tariffs on Canadian lumber exports after an old trade tussle re-escalated earlier in the year. The concern for Canada is that the US may impose additional punitive duties on different sectors as part of this negotiation and this could be problematic for the Loonie. Any restrictions that the US imposes via tariffs on Canada’s exports markets could hurt the Canadian dollar. Donald Trump has stated that this was the worst trade deal ever signed so he will inevitably be pursuing a good deal in US interests. Clients looking to buy Canadian dollars could see some better opportunities to purchase if negotiations start badly for Canada.
Manufacturing shipments are released tomorrow afternoon but it will be Fridays Canadian Consumer Price Index inflation numbers which could see a volatile end to the week. Inflation for July is expected to see a small pick up to 1.2% which would be welcome news for the Bank of Canada having recently raised interest rates in July, the first time since 2010. A positive number could help determine whether there will be a second interest rate cut later this year. The next interest rate decision will be held September 6th and this meeting will take stock of the bank’s quarterly Monetary Policy Report. Canadian unemployment has now fallen to its lowest level since the start of the financial crisis so there is a chance the central bank may be looking to hike again; if not in September then there is a good chance for December all boding well for CAD exchange rates.
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