Getting the best exchange rate can be achieved by understanding what is driving rates and the service of a specialist currency broker. Below are movements in just 30 days affecting Canadian Dollar rates when buying £200,000:
|Currency Pair||% Change||Difference on £200,000|
In the last week we have seen the CAD post some impressive gains against the Pound, with a rise in Brent Crude Oil prices to a near three-year high and an extremely strong set of jobs data from December released on Friday afternoon. This rise in Oil prices last week has been mainly attributed to rises throughout 2017 on the back of a closer working relationship between Russia and OPEC that has helped stem production, leading to greater demand. However there have been reports of heightened political tensions within Iran, a key member of OPEC, which saw Brent Crude rise to its highest levels since 2015 and soaring above $67 per barrel. Whilst we have seen prices soften slightly this week, prices are still considerably higher than the average for 2017 and remain above $60 per barrel.
The Canadian economy is heavily reliant on its exports of Crude Oil and therefore the higher the price, the better for the economy and therefore the CAD. If tensions in Iran continue and oil prices continue to be inflated then we could be set to see further gains for the Loonie.
There were further gains for the CAD on Friday with December’s jobs report highlighting an addition of almost 100,000 new jobs and seeing the unemployment rate drop to a record low of 5.7%. This has been seen as a huge positive for the Canadian economy and therefore we have seen the Canadian Dollar make gains off the back of this news too in the short term. I believe that this could also lead to longer term strength for the CAD as it makes the chances of further interest rate hikes from the Bank of Canada far more likely, as Stephen Poloz, Governor of the Bank of Canada, has previously stated that he would look to further improvements in data sets before a decision on interest rates would be made.
Looking further ahead this week, data from the Canadian economy is fairly light, so it will mostly likely be Oil prices and UK based data, such as UK GDP figures that are likely to drive rate movement over the coming days. The next key data release will be next week on Wednesday when the BoC announce their latest interest rate decision at 15:00. If they do decide to hike rates, with the pressure seemingly on them to do so, we could see further gains for the CAD against GBP.
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.