2016 was a turbulent year for the Canadian economy, however there is a whole host of reasons behind economists forecasting a better year this year.
The jobs sector appears to be recovering, with over 200,000 new jobs being created from August to December, 50,000 of those being in December. Full time roles outweighed part time ones and wages have also increased.
The price of oil has also been on the upward trend, something which the Canadian economy relies on heavily as it makes up a large portion of its exports. After falling below $30 a barrel last year, it has been steadily rising, up by $10 per barrel in the last month. This has been since OPEC (The Organisation of the Petroleum Exporting Countries) pledged to cut oil production in order to drive prices higher. If this continues to rise, this should have a positive impact on the CAD.
Canada’s trade is also picking up, on Friday a trade surplus in November of $526 million was reported for the first time in 2 years, meaning exports outweighed imports that month.
This positivity could be backed up by business executives this afternoon as the Bank of Canada release results of their Business Outlook survey, where 100 business executives provide their views on the short term economic climate. If this is the case we could see CAD strengthen further against the Pound.
Uncertainty is looming over the UK’s Supreme Court decision outcome, something which will almost certainly affect GBP/CAD exchange rates. We are yet to be informed of an exact date of the outcome, however predictions have it that this could be released between 12th-17th January. As this could happen at any time and could potentially cause large swings on exchange rates, I would recommend any clients looking to buy or sell Canadian Dollars to detail their requirement to their Account Manager here at Foreign Currency Direct to put a plan in place ahead of this decision.
You can call our trading floor directly on 01494 725353 and speak with any of our currency brokers, alternatively if you have any questions regarding anything you have read in this report please feel free to email me at ajs@currencies and I will be happy to discuss them further.
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