This Canadian Dollar report will examine the factors that could affect exchange rates in the coming weeks to help you stay informed if you need to make a currency transfer. The table below shows the difference you would have received in CAD when buying £200,000 at the high compared to the low during the past month.
|Currency Pair||% Change||Difference on £200,000|
The Organisation of Petroleum Exporting Countries, also known as OPEC are set to meet in Vienna on Thursday to decide whether to extend the oil cut program which expires in March. One year ago OPEC reduced oil production due to the price of oil collapsing to $50 per barrel from $120 a barrel late 2014. At present the deal that’s in place reduces the amount of oil that is produced across the globe as oil prices were plummeting due to a flooded market. At the meeting on Thursday reports are suggesting that OPEC are hoping to keep 1.8 million barrels of oil a day off the market, however this could be a sticking point for the Russians. Russia’s energy Minister Alexander Novak was happy with the OPEC deal when the oil price was drifting around the $50 per barrel mark.
However now that oil prices are fluctuating above $60 per barrel and rising forecasters are suggesting that it is unlikely that Moscow will want to extend the program past March, as Russia is not reliant on higher oil prices and are set to open more oil fields next year.
Oil is Canada’s largest export and the decisions made by OPEC tend to have a direct impact on Canadian dollar exchange rates. If the Russians announce that they will not be extending the program past March 2018, I expect the price of a barrel to fall which could have a negative impact on Canadian dollar exchange rates. However if an agreement is made I expect GBPCAD to fall back towards 1.65.
This afternoon the Governor of the Bank of Canada Stephen Poloz is set to give a speech about the financial situation in Canada. Interest rates have been hiked to 1% recently and at the last interest rate decision Mr Poloz announced that inflation had picked up in recent months and the central bank was happy with growth forecasts for the next 12 months. If this stance is taken again throughout the speech I expect this could be a positive event for the Canadian dollar.
Later in the week Canada are set to release the latest unemployment numbers. Unemployment currently sits at 6.3% and the consensus is for a drop to 6.2%. If this materialises this could provide further strength for the Canadian dollar and the dollar could have a good finish to the week.
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