Low oil prices, global uncertainty and the shock snap election announcement in the UK have all contributed to gains for GBP/CAD.

Global uncertainty and UK election helps GBP gain against CAD

Similarly to the USD and EUR, the Pound has also hit 2017 highs against the CAD this week, which can be largely attributed to Theresa May’s surprise announcement of a general election in June. In fact - the Pound is currently trading at near 7-month highs against the Loonie – an opportunity not to be sniffed at for CAD buyers.

The CAD’s losses began last week, when Bank of Canada governor Stephen Poloz claimed that there was still the chance of an interest rate cut in the near future if economic data doesn’t improve.

The interest rate in Canada is currently at record lows and the next anticipated move had been a rate hike, but if there are further hints of a cut in the future and economic data doesn’t begin to improve, we could see this continue to anchor the CAD’s strength. Monetary policy in Canada is also closely linked to inflation data, and this afternoon at 13:30 we have the latest consumer price index figures from March. The current projection is that there could be a drop compared to this time last year and if that is the case, especially following Poloz’s comments last week, there could be some lucrative spikes this afternoon for CAD buyers.

Trump’s cut on imports could harm Canadian Dollar exchange rates

Any clients with a CAD exposure may also be wise to keep an eye on developments from the International Monetary Fund’s meeting in the USA today and over the weekend. One of the key topics is set to be President Trump’s protectionist trade policies, and as the Canadian economy is heavily reliant on its exports of raw materials to the US, these developments could affect CAD exchange rates. The global economy will also be discussed, and as a commodity currency, the CAD is susceptible to volatility from global uncertainty.

Looking further ahead to data releases next week that could impact clients with a CAD requirement, on Tuesday we have retail sales figures released, followed by GDP figures for February on Friday.

Keep in close contact with your account manager at FCD who can keep you informed of all the latest market movements.

News

Read more articles
Exchange rates on this page are interbank rates and indicate where the market is trading to show the performance of a currency pair. They are not indicative of the rates which we offer. 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.