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 a month affecting Pound Sterling rates when buying £200,000 during trading hours on Thursday:
|Currency Pair||% Change||Difference on £200,000|
Sterling has made gains against the Canadian Dollar recently based on hints from Mark Carney the head of the Bank of England (BoE) that there is the possibility of a rate hike in the UK.
Another catalyst for the pound has been concerns of Saudi Arabia quitting the current Organisation for Petroleum Exporting Counties (OPEC) deal. Oil is Canada’s primary export and as such oil price can cause fluctuations in Canadian dollar value.
The Saudi’s have been at the forefront of an OPEC deal to limit the supply of oil to drive up the valuation of Saudi Aramco ahead of it’s IPO, however they have threatened to quit the deal altogether if other members do not adhere to the parameters of the deal. The magnitude of this situation should not be underestimated as the Aramco IPO is dubbed to be one of the most significant IPO’s in recent times.
Saudi Arabia is the world’s largest oil exporter if they were to quit OPEC and increase supply this will no doubt cause a fall in oil price and subsequently effect the Canadian Dollar.
I am of the opinion a rate hike in the UK is not going to materialise as quickly as Carney is making out due misleading economic data being the justification behind a potential hike.
Despite the situation with the Saudis, I would not rely on this to strengthen the pound against the Canadian dollar. There has been two consecutive rate hikes from the Bank of Canada (BOC) which sends out a strong message as to the health of the Canadian economy.
If I had a Canadian dollar requirement I would be taking advantage of current levels.
Today we will see the release of Canadian GDP data. Despite the general consensus there is going to be a slight drop, I am going against the grain and predict there will be a rise and we will see a small CAD spike.
For more information on how future data could affect your currency requirement, call our trading floor on 01494 725 353 or email me here.
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