This update examines the affecting factors for the GBP/CAD exchange rates in the short term. The table below shows the difference when buying £200,000 at the high compared to the low over the last month.
|Currency Pair||% Change||Difference on £200,000|
Canada awaits an interest rate decision today, however there is no expectation for any changes to the current 0.5% level. Over the last few months investors have been very cautious of Canada with policy makers highlighting the risk and weaknesses a lot more than the positives.
There is however an optimism moving forward as the first quarter growth is being predicted for 3.8% which follows 3.2% in the second half of last year. There has been positive gains in the jobs market along with housing booms in Vancouver and Toronto. Whilst Canadas Economy is not without its concerns, this could be one of the Bank of Canada’s Governor Stephen Poloz’s first chance for a hawkish outlook.
The Organisation of the Petroleum Exporting Countries will meet tomorrow in order to discuss an extension to the existing production restriction. There has been a reduction in the number of barrels of oil produced each day by 1.8 million in 2017 and this looks set to continue till 2018. There has been a 35% improvement in the cost of oil in the first quarter of 2017 compared to 2016, where the cost of a barrel fell to a 13 year low.
Canada is one of the biggest exporters of oil to the world and it is comfortably Canada’s biggest export. Any positive or negative stories relating to Oil can often have a direct effect on the Loonie.
If there is a realistic chance of a deal being reached at the OPEC meeting then I would not be surprised to see the GBP/CAD rate move into low 1.70’s. If you do have an imminent Canadian Dollar requirement get in touch with your broker to discuss your options.
For more information on how future data releases could affect your Canadian Dollar requirement, call our trading floor on 01494 725 353 or email me here.
The information on this web site is provided free of charge for information purposes only. It does not constitute advice to any person on any matter. Foreign Currency Direct plc. ("FCD") makes every reasonable effort to ensure that this information is accurate and complete but assumes no responsibility for and gives no warranty with regard to the same.
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