The G7 summit is being held in Canada this week and is likely to be the main focus for Canadian Dollar exchange rates, markets will be waiting to hear comments from Trump's who has previously been openly critical of NAFTA. The Canadian Dollar report below discusses how this could affect CAD exchange rates. The table below shows the difference in Canadian Dollars you could have achieved when buying £200,000.00 during the high and low points of the past 4 weeks.
|Currency Pair||% Change||Difference on £200,000|
It has been an interesting start to the month for Canadian Dollar exchange rates with GBP CAD having already hit as high as 1.73 and as low as 1.70 in the last week. Positive words from the Bank of Canada have helped prop Loonie rates higher however US president Trump’s NAFTA threats have done enough to sway investor confidence in the Canadian Dollar, making this week’s releases potentially pivotal.
With GBP CAD rates currently sitting in the mid 1.72’s and the markets having already potentially part-factored in the downside risk to a fallout in NAFTA (north American free trade agreement) talks I feel there is plenty of scope for the Loonie to recover it’s weekend losses.
Wednesday afternoon is looking very busy, with key international trade and domestic confidence data due. Last week, the markets will have noted the Bank of Canada’s favourable tone regarding it’s monetary policy stance, with investors now expecting an interest rate hike next month with real potential for a further one before the year comes to a close.
The BoC cited the gradual rise in oil prices (Canada’s main export) and the consistent drive in investment in heavy machinery and equipment reflected (import levels) an encouraging increase in domestic investment which should act as a solid platform for the economy moving forward. I expect this positivity to be reflected in Wednesday’s Import and export data. With both showing consistent rises since the start of the year, I feel if these continue in the same trend appetite for the Loonie will begin to surface making it more expensive to buy.
Economic data a side, the G7 summit being held in Canada this week is likely to take centre stage. Trump’s tendencies to openly criticise the NAFTA deal has no doubt been playing on investor confidence in the Loonie so it will be interesting to see how the markets respond to the US president facing his political counterparts on Friday. Trump has already spoken about imposing a 25% tariff on all car imports whilst shooting down Canada’s agricultural sector only this weekend, his talk of a bespoke deal aside from NAFTA isn’t likely to go down well with Canada or the markets. Depending on what tone the US president sets I feel there is some potential for the Canadian Dollar to lose ground providing CAD buyers with a spike to capitalise on.
For more information on how future data releases could affect your currency requirement, call our trading floor on 01494 725 353 or email me here.
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