This Canadian Dollar report will address the factors that could have an effect on CAD exchange rates over the coming weeks. The table below looks at the difference between the rate you would have achieved when purchasing £200,000.00 at the low and high levels during the past 3 weeks.
|Currency Pair||% Change||Difference on £200,000|
The Canadian Dollar has been gaining considerable ground against the Pound as the year comes to an end, with GBPCAD exchange rate dropping by 3.2% since the start of the month and finding support in the high 1.69s. There is a fairly strong argument that says that threshold could be broken should the Bank of Canada commit to raising rates at the start of next year as has been suggested.
The Canadian economy has performed well throughout 2017 and has recently showed an impressive level of sturdiness when faced with the ever fluctuating price of oil, Canada’s main commodity.
The strength of the Canadian economy had previously led the BoC to elude to multiple rate hikes back in September which prompted Sterling to fall below 1.60. That’s a $20,000 difference on a £200,000 transfer compared to current levels. Quite a heavy risk if you are looking to buy Canadian Dollars in the near future.
The rumours of a rate hike have taken a blow however, as last week’s Canadian growth figures game out 0.2% weaker than expected for October, with a decline in oil and gas production the main culprits for the slow down. The reading undermined the overall view of “sturdiness” and has left the markets to question the likelihood of a rate hike at the start of next year. Reuter’s latest poll suggests the odds have dropped down to a 47% chance form 50% and explains the Loonie’s stagnant trend over the course of the last week or so.
As a result of this, this afternoon’s Natural gas storage and Crude oil stock counts may well hold some weight for Canadian Dollar exchange rates, if they come out weaker than expected (suggesting higher demand) the odds may flip back in favour of CAD holders. As a result if you are looking to buy Canadian Dollars with Pounds, it may pay to capitalise on this week’s uncertainty just in case.
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.