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 in just a month affecting Pound Sterling rates when buying £200,000:
|Currency Pair||% Change||Difference on £200,000|
It has been a difficult month for CAD holders. As it became more and more evident the Bank of Canada would not push on with a third consecutive hike this year, investors began to lose interest in the Loonie, seeing it sink by almost 0.9% over the last week.
Evidently the Canadian dollar became a slight victim of its own success. Being a commodity based currency, the BoC grew wary of raising rates once more through fear it might drive the value of the loonie through the roof, making their exports far too expensive on the international stage. As a result, last Wednesday they left rates unchanged and the Canadian dollar slipped to 3 month lows against the pound.
Despite a slight fall from grace for the Loonie during last week's trading, it is worth taking note that the gains Sterling made across the board against the basket of major currencies’ on Friday was not reflected against the Canadian dollar. This suggests to me that the market sees an underlying value in the Loonie stemming from a consistently over performing Canadian economy.
Given the Oil output cut continues to be well respected by Canada's international competitors both within and outside of OPEC, Canada's leading commodity has continued to rise in price, currently floating around 2-3 year highs. The NAFTA agreement is also currently being renegotiated and if Canada can push from a position of strength I see very little room for further CAD weakness. I expect the trade and employment data due out on Friday to reflect this and can see the Canadian dollar becoming more expensive as the week goes on.
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