The Canadian dollar has weakened recently against the majority of major currencies as worries continue about global economic growth.
|Currency Pair||% Change in 1 month||Difference on £200,000|
It is anticipated there will be an interest rate hike by the Federal Reserve this week, but many investors are waiting keenly to hear about forward guidance. Reuters have the chances of a US recession at 40% in the next two years.
Canada is a commodity based currency, predominantly oil so its economy could be hurt by a slow-down in global growth.
Canadian home sales has dropped further this month, the resale of homes fell by 2.3% in November from October, which hasn’t helped the Loonie.
I feel that if it were not for the complete mess surrounding the Brexit situation we could be witnessing sterling strengthening against the Canadian dollar, but I am afraid Brexit is the key factor on GBP/CAD and will remain so for the foreseeable future.
If we look at the pound verses the Canadian dollar specifically I am finding it very difficult to see any reason for a significant increase in GBP value. It may be wise to take advantage of rates as they sit if you have to move short term.
Tomorrow we will see the release of Canadian Consumer Price Index (CPI) data. CPI data is a measure of inflation and can influence monetary policy decisions and due to this can cause volatility on the market. There is expected to be a drop on month on month figures. There is predicted to be a fall from 0.3% in October to -0.2% in November.
Despite this I still would not think this is going to have a substantial effect on GBP/CAD due to the lack of clarity surrounding Brexit. If you have to move short term it may be wise to take advantage of current levels.
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