This Canadian Dollar report will address the factors that could have an effect on 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 during the high and low points over the past month.
|Currency Pair||% Change||Difference on £200,000|
On Friday afternoon, Canadian Unemployment data was released and showed the rate falling when the markets expected there to be a rise above 6%. There was expected to be a small increase from 5.9% to 6%, however the level dropped to 5.7%. All the readings that accompanied the unemployment rate such as jobs created also showed unexpected increase for the month of December.
The good data has now boosted speculation that there could be another imminent rate hike from the Bank of Canada with some suggesting it could even come this month. Last year the central bank performed two rate hikes and Stephen Poloz who is the governor of the central bank in Canada mentioned any further hikes would come off the back of good economic data.
The GBP/CAD rate upon the release of the data saw nearly a 1 percent drop with the level breaking into the 1.67’s for the first time in 7 weeks. The Canadian Dollar was one of the best performing developed currencies last year, following a surge in domestic economic strength after the forest fires at the start of 2017.
In my opinion the Canadian Dollar looks set to make further gains, and any hints towards an imminent rate hike could cause instant market reactions. Whilst a rate hike in January 2018 might seem unlikely the last two hikes from the Bank of Canada came with little warning causing major volatility.
If you’re looking to purchase Canadian Dollars with Sterling then acting sooner rather later could protect you from further market losses. Those looking to sell Canadian Dollars in the last month on a $200,000 will now achieve an extra £11,640 and there could be further gains to be made in the next month. If you’re looking to trade this currency pair contact your broker to discuss your best options.
Thank you for reading my Canadian Dollar report, if you have any questions about upcoming transfers I would be more than happy to discuss them – you can contact me with any queries on 01494 725 353 or email me here.