Canada’s main export is oil and as such heavily influences the value of the Canadian Dollar. Crude prices reached an 18 month high on the first trading day of 2017. This was due to a deal between the organisation for petroleum exporting countries (OPEC) and other large oil exporters to cut production coming into play on New Years Day. Oil has been in oversupply for several years and has caused substantial drops in oil price.
Canada’s economy will no doubt benefit from the deal. If you are buying Canadian Dollars with Sterling you may be thinking it would be wise to get your trade done in case of a further rise in oil. I would however also take into account those involved in such deals have reneged on their promises in the past. I would also consider hanging on for the Supreme Court ruling on Parliaments vote on Article 50. I think there is the strong possibility the ruling will go in favour of the government having the vote and this may outweigh a rise in oil price.
If you have a trade to perform involving the Canadian Dollar place close attention to data releases this Friday. We will see figures on imports and exports, unemployment data and PMI figures. Although the Purchase Managers Index data can be deemed important due to it giving an insight in Canada’s overall economic condition I think unemployment figures will be more influential. I think there is the possibility of a rise in unemployment and the Canadian Dollar could lose some value as a result. If you have to move short term get in touch with one of our brokers who can provide you with a number of contract options in an attempt to maximise the return on your trade.
Oil prices may continue to rise which could strengthen the Canadian Dollars position against Sterling in the longer term. Call our trading floor on 01494 725 353 or email me here if you would like to discuss a requirement.
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