US Shutdown and Canadian Interest Rates – Impact on GBPCAD exchange rates (Tom Holian)

Despite the Bank of Canada having increased interest rates earlier this week the Canadian Dollar has actually weakened against the Pound during the last few days.

Indeed, GBPCAD exchange rates are now at their best trading level since the end of November.

The CAD$ has weakened owing to the uncertainty surrounding both NAFTA as well as the problems in the US with the government facing a shutdown.

A deadline has been set for midnight tonight as Trump and Republican leaders in Congress are looking to pass a spending bill in order to keep the US government open.

When this happened previously back in October 2013 this lasted for a fortnight and over 800,000 employees were affected.

The shutdown affects a number of different agencies and this will often negatively affect the value of the US economy and therefore will also negatively affect the Canadian Dollar as well.

The ongoing problems with what is happening with the NAFTA agreement has also weakened the Canadian Dollar and whilst this uncertainty continues I think the CAD could remain under a lot of pressure against the Pound.

UK Retail Sales came out a lot lower than expected this morning and typically this would result in Sterling falling against the Canadian Dollar but owing to the problems in the US as well as NAFTA this is the reason for the ongoing Canadian Dollar weakness.

Therefore, if you’re looking at selling Canadian Dollars it may be worth getting this organised in the near future.

If you have a need to make a currency transfer involving buying or selling Canadian Dollars in the coming days, weeks or months then feel free to speak with me directly as I will be more than happy to help you both with trying to time a transaction and getting you the top market rate when you do come to buy your currency compared to your bank or another currency broker.

Even a small improvement in the exchange rates can make a big difference so feel free to to email me and you may find you could save yourself hundreds if not thousands of Pounds. You can email me (Tom Holian) on teh@currencies.co.uk and I will respond to you as soon as I can.

CAD Forecast – Why is the CAD Struggling Despite Wednesday’s Interest Rate Hike? (Matthew Vassallo)

The CAD has found life tough going of late, struggling to make any significant impact against Sterling since the turn of the year.

GBP/CAD rates move back above 1.73 overnight and although the CAD found some support around this level, the current trend is somewhat baffling considering the relative health of the UK & Canadian economies.

The uncertainty surrounding Brexit is having a huge impact on investors risk appetite for the Pound. Despite talks progressing to phase two, it has done little to dispel the current negativity and as such the Pound is struggling to make any sustainable impact against the majority of major currencies.

The Canadian economy on the other hand was boosted by Wednesday’s interest rate hike by the Bank of Canada (BoC). Usually a rate rise would boost the currency in question and with Canada’s economy seemingly outperforming that of its UK counterpart, why have we seen the Pound make further gains against the CAD?

The answer probably lies with the current concern surrounding the terms of the North American Free Trade Agreement (NAFTA). US President Donald Trump has been extremely vocal about his dissatisfaction with the current terms, feeling they do not benefit the US as they should.

He has threatened to pull out of the agreement, which if it were to happen would be extremely detrimental to the Canadian economy.

Whilst Canada’s global export of crude oil helps support their economy, their primary importers are the US. Therefore any shift in this trade relationship will no doubt have an impact, which is currently being factored into the CAD’s value, at least to some extent by investors.

Whilst Trump may struggle to convince Congress to pass any decision to leave NAFTA, the current uncertainty is weighing heavily on investors and as such the CAD is struggling to make an impact against the major currencies, including the Pound.

If you have an upcoming GBP or CAD currency transfer to make you can contact me directly on 01494 787 478. We can help guide you through this turbulent market and as a company we have over eighteen years’ experience, in helping our clients achieve the very best exchange rates on any given market.

Our award inning rates can be accessed very easily over the phone and I can keep you posted with key market developments ahead of any prospective exchange you need to make.

Feel free to email me directly on mtv@currencies.co.uk to find out all the options available to you ahead of your currency transfer.

Why did the Canadian Dollar fall when interest rates were hiked? (Joseph Wright)

Yesterday the Bank of Canada chose to raise interest rates for the third time in the last year.

The interest rate now sits at 1.25% and those that decide on making the decision to change interest rates have stated that this decision can be put down to increasing inflation levels, and an a strong Canadian economy.

Many economists and market traders had predicted the move and the Loonie had been increasing in the lead up to the decision, and once it was made official many took profits on their positions which put downward pressure on the currency.

The ongoing issue of the North American Free Trade Agreement (NAFTA) is also putting pressure on the Loonie as fears surrounding Trumps recent comments regarding the agreement have lead many to believe that it could be renegotiated which wouldn’t work in favour of Canada.

If the US pulls out of the agreement I believe CAD will fall sharply, and Governor Poloz has alluded to this possibility so those planning on converting Canadian Dollars should be aware of this.

If you would like to be updated should the rates move dramatically, do feel free to register your interest with me as working on a trading floor allows us to react quickly to fast price changes.

If you have a large currency exchange to carry out in the coming days, weeks or months then you are more than welcome to speak with me directly as I will be more than happy to help you both with trying to time a transaction and getting you the top market rate when you do come to buy your currency. A small improvement in a rate of exchange can make a huge difference so for the sake of taking two minutes to email me you may find you save yourself hundreds if not thousands of Pounds. You can email me (Joseph Wright) on jxw@currencies.co.uk and I will endeavour to get back to you as soon as I can.

NAFTA negotiations to take centre stage

On the 23rd January, the NAFTA negotiations will resume which could be problematic for Canada and consequently have a negative impact on Canadian dollar exchange rates.

NAFTA, which is the North American Free Trade agreement, is an agreement between the US, Canada and Mexico and it allows all three countries to trade with one another for free. Since Donald Trump’s appointment he has made it clear that the NAFTA trade deal is the worse trade deal in history and he plans to make change as soon as possible.

Donald Trumps argument is that the US imports outweigh their exports due to the cheap labour in Mexico and many manufacturing jobs have been lost to the cheap labour. If Mr Trump cancels the agreement he will need this passed through the Senate, which could put pressure on the Canadian dollar and US dollar exchange rates. For clients that are selling Canadian dollars it may be worth taking advantage of current levels before the negotiations begin.

In other news the Bank of Canada hiked interest rates yesterday from 1% to 1.25%. The BoC explained the reason for the hike was high inflation and improved consumer spending. The Royal bank of Canada are now forecasting that the BoC could hike interest another 3 times this year to 2%. If Canada remains part of NAFTA this prediction could come true however I am skeptical as I believe the US President will take this issue to the Senate at some in the next 6 months.

If you are buying or selling Canadian dollars this week, month or year and I haven’t covered your currency pair I would recommend emailing me with the currency pair (CADUSD, CADGBP, CADAUD) and the reason for the transfer (company goods, property purchase) and I will response with my forecast and the options available to you drl@currencies.co.uk. Alternatively if you would like to discuss your requirements over the phone call 01494-787478 and ask to be put through to Dayle Littlejohn.

** If you are already using a brokerage and would like to know if you are receiving the best rates possible email me with the exact figures and I will reply with our live price. This will take you a few minutes and in the past I have saved clients thousands! **

Bank of Canada raise interest rates as expected to 1.25% – Slight CAD strength against most majors

Today saw the Bank of Canada raise interest rates by 0.25% which saw slight gains for the Canadian Dollars against most majors.

The BOC however did mention in a statement that there are concerns surrounding the NAFTA agreement (North American Free Trade Agreement) was still a concern and this held back any major gains for the Canadian Dollar.

Generally, an interest rate hike is seen as very positive for a currency and a cut in rates is seen as negative, however with the hike in rates mainly expected and the warning regarding NAFTA and the concerns surrounding it we have seen Canadian Dollar exchange rates hold fairly firm.

 

Bank of Canada predicted to hike rates (Daniel Johnson)

Is a Rate hike justified by the BOC?

This afternoon is the Bank of Canada (BOC) interest rate decision. The expectations are that there will be a hike from 1% to 1.25%. Bank of Canada Governor, Stephen Poloz has stated a change in interest rate would be data dependent. If this is the case then  a rate hike should occur today. We have recently witnessed the best unemployment data in four decades.

Personally, I am of the opinion a rate hike in the current climate is risky. Donald Trump has stated he is far from happy with the North American Free Trade Agreement (NAFTA). Trump feels it is not beneficial enough for the United States and renegotiations are already under way. Trump’s demands are considered unrealistic by some and talks have been problematic. Mexico and Canada are both heavily reliant on the US buying their goods and any potential change could have a significant impact on their economies.

Trump has also stated he could scrap the deal altogether which could be catastrophic for the Canadian economy, if there is one thing the markets do not react well to it is uncertainty and if the deal is scrapped I would expect the Canadian Dollar to weaken significantly. The exchange moves on rumour as well as fact and usually an anticipated rate hike would cause the currency in question strengthen substantially. This has not been the case on this occasion and I think this could be down to the NAFTA situation.

During such unpredictable times you need an experienced broker on board if you wish to maximise your return. If you have a pending currency transfer let me know the details of your trade I will endeavor to assist. There is no obligation to trade by asking for my help, I will provide a free trading strategy to suit your individual needs. If you do wish to try our service you can trade in the knowledge we are a no risk entity, as we do not speculate. Foreign Currency Direct PLC has been in business for over 16yrs and we are registered with the FCA. If you already use a provider I can perform a comparison within minutes and I am confident I will demonstrate a considerable saving. I can be contacted at dcj@currencies.co.uk.

Will GBPCAD hold above 1.70?

The pound to Canadian dollar levels have on the interbank rate improved back over 1.70 as concerns over the NAFTA (North American Free Trade Agreement) surfaced creating uncertainty over the outlook for the Canadian economy. The Canadian economy is very much supported by its exports in key commodities like oil and lumber which the US is a major purchaser of.

Should NAFTA be rejected by Trump then the Canadian would struggle, this could present better rates in the future. If you have a transfer buying Canadian dollars then making the most of this uncertainty could be a wise move as the pound is not guaranteed to keep its head above water with so much uncertainty over the Brexit.

The pound to Canadian dollar has been trading in a range on the interbank rate range from 1.59 to 1.77 so currently, the levels in the 1.70’s are not bad at all. The expectation for the pound to keep on climbing is not without risk, key elements of Brexit are still to be finalised and this could see the pound lower.

The pound has risen against the Canadian dollar as NAFTA concerns and optimism over Brexit support the rates, this could quickly change course however. Tomorrow is the all-important Bank of Canada interest rate decision and this could see volatility on the currency pairing, with the US in a process of raising interest rates there is some pressure on the Canadians to follow suit to keep up the pace. The price of oil is also important in all of this, most analysts predict the price of oil could rise in 2018, this would support a stronger Loonie dollar.

If you need to buy or sell Canadian dollars against the pound understanding the latest trends and themes is central to achieving the best rates of exchange. For more information at no cost or obligation please contact me Jonathan Watson by emailing jmw@currencies.co.uk

Thank you for reading and I look forward to hearing from you.

 

 

CAD Exchange Rates ahead of Bank of Canada Rate Decision

The Canadian dollar is likely to be in for a volatile week as the key interest rate decision from the Bank of Canada on Wednesday fast approaches. There is a good chance the central bank will look to raise interest rates by 0.5% to 1.25% which will make this the third interest rate hike since summer 2017. The Bank of Canada raised interest rates twice last year and surprised the markets with the first hike in July on the back of stronger data which permitted the central bank to follow in the US’s footsteps in terms of monetary tightening.

Clients looking to buy or sell Canadian dollars are likely to see volatility on Wednesday depending on the outcome. A rate hike is likely to see the dollar strengthen although the market reaction may not be as strong as some are hoping for. The prospect of a rate hike has already begun to be priced into the market although my view is that the dollar should still strengthen if there is a hike. Those looking to move sell Canadian dollars for pounds or Euros could be –presented with a good opportunity to convert following the announcement so it may be worth positioning yourself ready if there is a positive market reaction.

The risk of course is that if the Bank of Canada don’t raise rates then the dollar is likely to weaken as the markets would have got ahead of themselves. Clients looking to buy Canadian dollars with pounds could see a jump higher. Rates for GBP CAD are currently sitting at 1.7130 whilst rates for CAD EUR are at 0.6565.

For anyone with a pending requirement then please feel free to get in touch with me James to discuss your specific requirement and how we can help you with the conversion and transfer. You can email me at jll@currencies.co.uk

NAFTA Breakdown threatens the Canadian Dollar? (Daniel Johnson)

NAFTA Negotiations are set to be problematic.

The North American Free Trade agreement is key to the health of the Canadian economy. The agreement between the US, Canada and Mexico is under threat as US President , Donald Trump feels the deal is nowhere near as beneficial as it should be to the US.

Canada is heavily reliant on the US purchasing it’s exports, if the deal is changed or indeed axed this could have a significant impact on the Canadian economy and in turn the Canadian dollar.
Canadian Prime Minister, Justin Trudeau has been reaching out to Republican senators in an attempt to stave off the trade pact’s collapse. Trump’s demands are deemed to be unrealistic and negotiations are set to be difficult.

The next round of talks are to be held in two weeks time and if it is anything like the previous round of talks that was held in December it may yield little progress.
Trudeau has stated that the NAFTA topic is currently the t issue that worries him, the most. Royal Bank of Canada Chief Executive Officer, David McKay spoke on Tuesday and said that the chances of a NAFTA withdrawal are rising.

If you are a Canadian Dollar seller it may be wise to take advantage of current rate.

BOC Monetary Policy Report, BOC Rate statement and BOC Interest Rate Decision

The next release of importance are due next Thursday. The Bank of Canada (BOC) publishes the monetary policy report. It is a study of economic movements in Canada. It can give an indication as to monetary policy moving forward. If investors get an indication that there could be a change on the horizon CAD value can be effected.
Next up we have the BOC rate statement. This is used as a medium to keep investors informed on monetary policy decisions, specifically interest rates.
Following the rate statement we have the interest rate decision itself. I would be very surprised to see any change despite some very impressive unemployment figures of late. I think you would have to see consistent positive data releases and clarity over the NAFTA situation in order to see a hike.

If you have a currency requirement I will be happy to assist. It is crucial to be in touch with an experienced broker when the market is currently so hard to predict. If you let me know the details of your trade I will endeavour to produce a free trading strategy to suit your individual needs. Have faith knowing you will be dealing with a brokerage in business for over 16yrs, Foreign Currency Direct Plc. We are a no risk entity as we do not speculate on the market and we are registered with the FCA. If you have a currency provider take a minute to send over the rates they offer and I am confident I can demonstrate a significant saving. I can be contacted at dcj@currencies.co.uk . (Daniel Johnson) Thank you for reading.

What can we expect for GBPCAD rates in January?

The pound has dipped against the Canadian dollar, principally owing to the developments in the price of Oil which has improved lately. The Canadian dollar is known as a commodity currency and it will often react to changes in the price of certain commodities which directly support and influence the Canadian economy. Oil is one of Canada’s main exports and a key driver of prices for the Loonie dollar against all the major currencies.

The outlook for sterling is actually much more positive following the progress of the withdrawal agreement in December. Markets are now eagerly awaiting the next developments for the pound following Brexit, the absence of any new news is seeing sterling gently drift higher. The lack of bad news can often be good news on the currency markets!

Sterling is likely to struggle against the Canadian dollar with the Canadian economy benefitting from an improved global outlook which supports the price of Oil. Expectations for the pound are mixed but with any trade deal likely to take many months to sort out, if I needed to buy Canadian dollars soon I would not be hanging around hoping for any dramatic improvements.

Other global factors will surely act as a driver on the Canadian dollar, the NAFTA discussions and the prospect of any further Canadian interest rate hikes could act as a facilitator for GBPCAD exchanges. Overall developments for the rate could see GBPCAD climb above the recent attractive levels for buyers of 1.70 plus.

If you have a transfer buying or selling Canadian dollars against the pound there is an expectation that we will see some bigger movements in the coming weeks as markets get settled in the for the New Year. The next direction will largely depend on the unfolding of global events so making sure you have targets and keeping up to date with the latest trends is key to maximising your position.

For more information at no cost or obligation to help maximise your position please speak to me Jonathan Watson by emailing jmw@currencies.co.uk.  Thank you for reading and I look forward to hearing from you.