Oil continues to rise but the Canadian Dollar is suffering at the hands of Trump's decision to impose trade tariffs on Canadian wood. Is this the beginning of longer term weakness for the Loonie? The below table shows GBP/CAD exchange rate movements and the difference you could have received when trading between the high and low point of yesterday's trading session.
|Currency Pair||% Change||Difference on £200,000|
The Canadian Dollar has started to weaken again after a recent pause in its fall. CAD exchange rates are being impacted by the latest events in the US surrounding President Trump. The prospect of an impeachment is putting added pressure on the Canadian Dollar with a flight to safety to other currencies to include both the Japanese Yen and Swiss Franc. The price of oil has also been rising this week which would normally result in Canadian Dollar strength due to its status as a major exporter of oil.
The fact that the Dollar is weakening highlights just how sensitive the latest Trump news is on the currency markets.
The loonie has been suffering ever since that old softwood trade dispute between the US and Canada was reignited after the US imposed a trade tariff on Canadian lumber three weeks ago. The concern for the Canadian Dollar and other commodity currencies is that other tariffs may be introduced which is likely to see continued pressure on them. A review of NAFTA is also underway with talks expected in August. It is worth bearing in mind that three quarters of Canada’s exports go to the US.
Canadian exchange rates are likely to see an interesting end to the week with a raft of economic data from Canada this afternoon. Canadian Consumer Price Index inflation numbers are expected to rise to 0.5% in April up from 0.2% the month prior which could lend some support to the loonie. Canadian retail sales are also expected to see an improvement into positive territory which could provide further support for the Dollar.
The combination of the latest Trump developments and the strong UK retail sales data has presented a good buying opportunity for GBP/CAD almost touching the recent highs seen two weeks ago. Get in touch with us on 01494 725353 if you'd like to discuss a transfer involving the Pound and Canadian Dollar.
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