Oil prices have trended lower over the last week, due to lower demand putting crude oil prices under pressure. As a commodity based currency the Canadian dollar is affected by changes in the price of oil. If we do however see the tension in Iran escalate further, this could put upward pressure back on the price of oil and hence be reflected in a stronger Loonie.
|Currency Pair||% Change (Month)||Difference on £200,000|
Canada has recently seen a spate of weaker economic data releases with the more recent being retails sales figures.
Today Canadian Wholesale Sales for the month of May saw a sharp fall to -1.8% against a forecast of 0.5% and the previous months figure of 1.6%. Wholesale Sales reports the change in the value of sales at the wholesale level across Canada and an indicator of future consumer spending. A reading that is stronger than forecast is seen as positive for the Canadian dollar, and a reading that is weaker is seen as negative.
The Royal Bank of Canada have cut their growth forecasts for 2020, as fears over the global markets and the current trade war between the US & China, are expected to impact the Canadian economy.
Next Wednesday will see the release of Canadian GDP (Gross Domestic Product) data for the month of May. The previous reading was 0.3%, and given we have seen weaker data sets more recently then a fall below this for the month of May could see the Canadian dollar lose value.
Pound to Canadian dollar exchange rates are close to the interbank lows we saw back in 2016 and 2017 as Brexit concerns couples with a stronger Canadian dollar. Clients with a position to buy or sell Canadian dollars should be conscious of weaker oil prices and/or weaker Canadian economic data which could adversely affect the value of the Loonie.
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