GDP figures were released on Friday and showed a bigger than expected improvement in economic growth. It was forecasted to show an increase of 0.3% and came out twice as big at 0.6%. It resulted in the CAD gaining in strength making a £200,000 purchase secure nearly $2,500 less.
This was also the seventh increase in the last eight releases; this gain was put down to a significant improvement in factory orders over the period.
Canada’s economy was one of the worst losers over the last 12 months due to their economic dependency on the export of Oil. With the fall in that commodity’s value by almost half it had a big impact on the Canadian dollars value. This release along with many other economic releases from Canada does show a clear trend that the country is gradually recovering from this shock to oil prices.
The central bank of Canada cut interest rates twice in 2015 to combat the fall in oil prices. Their next meeting and update is planned for April 12th and is a date to set if you have exposure to the Loonie. Most don’t expect a further change to central rates until next year however these ever changing forecasts released from the bank will have an immediate impact on its value.
Later today we have the latest information from the manufacturing sector within Canada. Most expect this to remain positive and in turn make the CAD more expensive to buy still.
The Manufacturing sector was the largest contributor to these ever improving GDP figures last week. It expanded by 1.9% in January and has grown every month since June 2016 bar one. As a result it seems increasingly likely that the CAD will be more expensive this afternoon over this morning.
Get in touch with us if you’re planning on buying or selling the Canadian Dollar this year, as a number of global concerns could impact its value. Call 01494 725 353 or email me here for more information.
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