This Canadian Dollar report will address the factors that are likely to affect exchange rates in the short term if you are buying abroad or making a currency transfer. The below table displays the difference in CAD you would have achieved when buying £200,000 over the past six weeks.
|Currency Pair||% Change||Difference on £200,000|
Due to a fall in Oil (Canada’s most valuable export) prices resulting from an increase in output from Libya and Nigeria, many expected the Loonie to suffer greatly towards the end of last week, but due to a string of remarkable economic data being released, the CAD was able to override the hit and fully take advantage of the UK’s political uncertainty. GBPCAD slumped by almost 2.3% making providing an extra £2,800 on a $200,000 transfer. With average earnings up by 1% and more than 55k jobs created in the May, there are plenty of reasons for investors to flock toward the Loonie as the current economic output looks promising.
Last Friday, GBPCAD hit the low 1.70’s in a convincing run and it will be interesting to see if we see a break through that psychological mark on Thursday should retail sales figures surprise the market as well. To make sure you are in a position to capitalise on the next spike in the market, make sure you detail to your account manager who will happily formulate a plan of action to maximise your returns.
The simple fact is long term CAD strength is currently limited by the Bank of Canada’s reluctance to raise interest rates and help the currency appear more competitive on the international stage. Their reluctance stems from fears that the country will require liquidity should we see yet another fall in Crude oil prices. After all, the rumours of a price war could be in the making between Qatar, Saudi Arabia and Egypt make for rough reading. It is also worth noting though the Loonie managed to make inroads against the Pound last week, it struggled to make any real strides against the dollar which suggests to me that we could see those recent gains reversed should the political horizon in the UK clear. If you’re are looking to sell your CAD, I may be worth capitalising on these near two month highs.
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.
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