Oil prices rise and Growth is recorded

The Canadian economy is showing further signs of positivity, after it was reported yesterday that it grew by 0.4% in November compared to October, more than was expected. A surge in Manufacturing contributed to this growth, with a higher output of fuel (petrol and coal), machinery, food and electronic products. Oil prices also rose yesterday, which is key for the Canadian economy with oil being its largest export, following from OPEC’s cut in oil production.

OPEC agreed in December to curb production in an effort to boost the value of oil, and since doing so the 11 members have averaged 30.1 million barrels per day in January compared to 31.17 million per day in December. So far compliance to the agreement has been high, well above analysts had forecast, and if this continues this could be an excellent boost to the Canadian economy and therefore the Loonie.

How is Donald Trump affecting the Canadian economy?

However, overnight Bank of Canada Governor Stephen Poloz provided an update on the Canadian economy since the appointment of Donald Trump. He gave clues that a future change to interest rate policy could be on the cards, when saying that the average rate of Inflation has been close to target over the past 25 years, but that it can take up to two years for any change in Interest Rates to filter through. The new US administration is already having an impact on the Canadian economy – with the CAD’s value being raised with the USD, causing exports to become more expensive.

This afternoon at 2.30pm, Manufacturing PMI (Purchasing Managers Index) for January will provide an insight into sentiment of over 400 Canadian Purchasing Executives within the Industrial sector. If this data impresses once again, we could see further gains for the Canadian Dollar, therefore any clients looking to purchase CAD with Sterling may wish sooner rather than later.

For more information on how future data releases could affect your Canadian currency requirement, call our trading floor on 01494 725 353 or email me here.

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