Since the beginning of the week the general trend for GBP/CAD has been a decline for the Pound. This can be attributed to two factors. The first of which is a gradual rise in oil price. Oil is Canada’s main export and as such has a major effect on the value of the Canadian Dollar. The second is the uncertainty surrounding the UK in regards to trade negotiations and the health of the UK economy in general.
The possibility of a long drawn out exit now seems more probable considering the ruling the government will have to vote on whether article 50 is triggered and the subsequent Supreme Court judgement in December.
Vladimir Putin has also stated that oil supply will be limited from Russia reducing the problem of current oversupply. Taking this into account I think we could see continued strength for the Canadian Dollar so it may be wise to take advantage of current buoyancy levels on GBP/CAD if you are a Canadian Dollar buyer.
Tomorrow at 14.30 is the release of Consumer Price Index Data. CPI is a measure of price movements by the comparison between the retail prices of a representative of goods and services. I think we may see a slight increase due to a slightly more positive outlook for the Canadian economy and as such, we could see Canadian Dollar strength.
Also, keep an eye on retail sales next week on Tuesday at 14.30. These are also known to move the markets and again I think there could be a slight rise which could be beneficial for the Canadian Dollar.
For more information on how future oil prices could affect your CAD requirement, call our trading floor on 01494 725 353 or email me here.
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