Oil prices and the value of CAD are synonymous with one another. The economy relies heavily on its export of oil, and with oil prices falling and demand decreasing its likely the economies GDP will be negatively hit.
That being said, much of the movements for GBPCAD are still tethered to the UK’s referendum with the outcome still yet to be understood. Whilst the UK prepares for the unknown the Canadian economy has its own uncertain times ahead.
Oil prices set to fall further
Much of the recent strength in oil prices fell on the back of production freezes, sanctions in Iran and outages in Libya and Nigeria. This in turn boosted the price of oil on limited supply.
The Organization of Petroleum Exporting Countries (OPEC), who work with nations to stabilise the price of oil by managing the supply and demand chain, have raised concerns that Saudi Arabia are not cooperating with other nations. This paves the way for other nations to follow suit and flood the market with more cheap oil, causing further oversupply leading to falling oil prices.
Crude oil is currently trading at $47.12 a barrel with expectations for further falls towards the $40 in the coming months.
Could GBPCAD rates continue their climb?
Positive GDP estimates this morning out of the UK show little economic damage from the Brexit vote yet, we could see further movements for GBPCAD with the UK’s mortgage approvals next Tuesday. I am expecting some weakness for the currency pair with the housing market likely to take a hit from the Brexit vote. If you need to buy Canadian Dollars next week, doing so today or Monday could save you in the near future. You can email me at email@example.com, I will be able to put you in touch with one of our brokers who could save you money on a currency transfer by offering you better rates than the banks
The forecasts for future prices of oil are weighing on Canadian Dollar strength at the moment, as although the medium term trend for GBP/CAD has been downward, over the past 5 or so trading days we’ve witnessed a revival in Sterling’s value with the currency gaining around 5 cents.
This improvement for Sterling sellers has fallen in line with the oil price as the two are closely correlated, due to oil being the biggest export of Canada.
The Canadian current deficit is also becoming a major talking point as the provincial government of Alberta suggested that it would increase by as much as CAD $400m due to the wildfires earlier in the year that have heavily impacted oil production.
The deficit expansion coupled with the falling price and forecasts for oil could be the catalysts for a fall in the Canadian Dollars value in future, so anyone holding onto Canadian Dollars in the hope of selling them at higher rates may wish to reconsider as I’m not sure if it will get a whole lot better, and the gains since the Brexit have been substantial with the GBP/CAD pair close to their 3 year low.
There isn’t any major economic releases out of Canada this week but tomorrow will see UK GDP estimates for the second quarter of this year at 9.30am. There could be movement within exchange rates due to this release so keep an eye on markets around that time, and get in touch if you wish to discuss them.
If you would like to discuss an upcoming currency requirement between GBP/CAD, or any other major currencies for that matter, feel free to contact me on firstname.lastname@example.org in order to ensure you make a well informed decision on when to make that particular transfer, as well as benefiting from highly competitive exchange rates from one of the UK’s leading foreign currency brokerages. Just provide me with a basic outline of your currency requirement and I will be back in touch with you as soon as possible.
We’ve written extensively about the relationship between oil and the Canadian Dollar on this blog before, and this month that relationship has really been a talking point as the price of oil dominates financial headlines and CAD has experienced a volatile month.
Crude oil prices have risen 15% in August, mostly off the back of speculation that OPEC members will reduce output but also a weakening US Dollar has boosted oil’s demand as the commodity is priced internationally in US Dollars.
The Canadian Dollar has spent most of the month gaining in value when compared with the British Pound, which is what you would expect as it’s in line with Canada’s biggest export gaining in value, but as oil has softened over the past week so has the value of the Loonie, and this is something Canadian Dollar sellers must pay close attention to.
I steep drop in oils price is likely to have a negative impact on CAD’s value, so Canadian Dollar sellers may wish to take advantage of the recent gains as oil could continue to soften after such a bullish run, particularly if the USD strengthens.
Those planning on converting GBP into CAD should bear in mind that although the Pound has dropped quite a lot recently, it is still far from the lows of 2011-2013 when the pair spent a lot of time below the 1.60 mark which is over 10 cents away from the current levels.
Feel free to get in contact with me if you would like to discuss an upcoming currency requirement you need to make. You can email me directly on email@example.com in order to ensure you make a well informed decision on when to make that particular transfer, as well as benefiting from highly competitive exchange rates from one of the UK’s leading foreign currency brokerages. Just provide me with a basic outline of your currency requirement and I will be back in touch with you as soon as possible.
Buying Canadian Dollar rates, GBP/CAD, have come under further pressure for the third week in a row heading into the weekend. Luckily for Canadian Dollar buyers however, some very poor news out of Canada has balanced out the effects, and as this article is being typed the Pound is slightly up against the Canadian Dollar, unlike its other currency pairings.
Canadian inflation and retails sales all came in staggeringly low for last month on what is normally a boosted period during the summer holidays. It unsurprising that low retail sales figures how come out at the same time as low inflation, as low spending in the retail sector will not translate in a healthy upkeep of prices, but rather the opposite.
Therefore the Canadian Dollar as down against most of its major counterparts as a result.
However, this positive news for Canadian Dollar buyers is being eaten into by the severe sell offs of Pounds before the weekend which we have become used to seeing as a regular feature on the currency markets as of late.
At the end of the week speculators at high street banks, the heavy market movers due to the volumes of currency which are moved each day, have to choose a dominant currency to which to store their profits in before the weekend. Due to the recent severe instability and lack of value surrounding the Pound, the Pound has been very low on the priority list.
This sudden fall in demand for the Pound is why each Friday afternoon like clockwork we are seeing the Pound lose value against most major currencies.
However there is a clear recovery trend at the moment for the Pound so anyone considering selling Canadian Dollars at the moment may be wise to move sooner rather than later to avoid any losses.
Feel free to reach me over the weekend whilst markets are close and I will reply as soon as I am able to discuss your requirements in more detail and develop a strategy for your transfer to maximise your currency return. firstname.lastname@example.org
The Canadian Dollar has continued to climb in line with the improving oil price, as Sterling finds itself in the unenviable position of August’s biggest loser of the major currency pairs.
The Canadian Dollar is closely correlated to the value of oil as it’s the country’s biggest export, so with oil recently hitting a one month high it’s no surprise to see the Loonie posting gains, and I think it’s worth noting that CAD has gained on the USD for around 6 consecutive trading sessions now.
The rise in oil (and therefore CAD’s value) has mostly been put down to talk of a production cut at next months informal OPEC (The Organization of the Petroleum Exporting Countries), as less oil in circulation is likely to boost its value.
The gain in CAD’s value has left Canadian Dollar sellers which a great opportunity to repatriate their funds into Pounds, as the pair are currently trading close to their 52 week low on GBP/CAD.
It may be wise for CAD sellers to take advantage of the current levels as should oil see another sell-off we could see CAD’s recent gains wiped out.
If you are planning to use GBP to buy a foreign currency it may well be worth your time getting in contact with me on email@example.com in order to ensure you make a well informed decision on when to make that particular transfer, as well as benefiting from highly competitive exchange rates from one a leading foreign currency brokerage. Just provide me with a basic outline of your currency requirement and I will be back in touch with you as soon as possible.
- GBPCAD exchange rates near a 3 year low
- Positive inflationary data for UK provides little comfort
- Loonie strength following upbeat oil prices
- Rates likely to deteriorate further
Demand for Pound Sterling crumbles as Brexit uncertainty continues
The UK’s vote to leave the EU has done little to help Sterling in recent weeks, whilst the UK government plans its departure as some predict in 2017, very little reassurance from government has raised conspiracies as to when, if at all, Article 50 will be invoked.
Theresa May – British PM has attempted to reassure the public by ‘making a success of Brexit’, and as she discovered rather imminently, she has a number of hurdles to jump before she can even consider the official withdrawal from the single market. Not foremost, the legal implications that have now come to light in recent days, which some have stipulated as a potential blocking of Article 50.
Leaving the EU will be no easy task, decades of social, political and economical constructs need to be untangled whilst a need for positive relations with other remaining members needs to be maintained. And in the mean time, whilst we examine the implications of such a vote on the UK’s economy, Sterling bares the brunt of all the decisions that arise.
If the UK does leave the EU, it wont be for at least 2 years from the official acknowledgement of Article 50, the UK could remain in limbo until 2019. What impact will these decisions have on an already punished Pound?
Oil prices help to boost the Canadian Dollar
On one side we have Sterling weakness and on the other, a currency driven by the price of oil. Whilst prices remain low compared to the highs of last year, the parallel’s of Brexit and commodity currencies stretch into unknown territories. It’s difficult to imagine what rates would look like if oil prices were at the highs seen last year.
Oil prices hit a one month high on Monday, are prices likely to continue their uphill trend? Russia and Iran are flooding the markets with their supply of oil, demand for oil could therefore fall coupled with competitive prices. I am therefore expecting oil to peak and fall once again in the latter part of the year.
GBPCAD rates to fall to low 1.60’s
Oil prices will likely continue to climb in the very short term, this coupled with Brexit uncertainty could drive current rates to levels not seen in 3 years. I would therefore encourage CAD buyers to make the most of current rates. If you would like to find out the more about currency rates, or have questions as to how to transfer funds at the best rates possible, email firstname.lastname@example.org.
The Pound is trading at almost a 3 year low against the Canadian Dollar, as you would have to go back as far as October of 2013 to see the pair trading below 1.7000.
The UK’s ‘Brexit’ has been behind most of the recent substantial drop as currency markets were hoping for a vote to remain within the EU, but after recovering somewhat after the Pounds initial steep drop in the aftermath of the Brexit vote, the downward trend has returned once again.
Not only is Sterling under pressure across the board as economic data being released from the UK has been disappointing in it’s post-brexit environment, but when compared with the Canadian Dollar the Pound is struggling as CAD goes from strength to strength as oil gains value.
The Canadian Dollar is highly correlated to the oil price as oil is one of the country’s largest exports, so movement in the value of oil can have a knock-on effect on the Loonie. Over the past few days oil has risen from $41 to $46 and this move has spilled over into CAD exchange rates.
Moving forward I expect the Pound to continue to come under pressure, as data disappoints and there is potential for further interest rate cuts to alleviate the pressure on the UK’s economy.
If you would like to discuss an upcoming currency exchange you need to make between GBP and CAD, it’s well be worth your time getting in contact with me on email@example.com in order to ensure you make a well informed decision on when to make that particular transfer, as well as benefiting from highly competitive exchange rates from one of the UK’s leading foreign currency brokerages. Just provide me with a basic outline of your currency requirement and I will be back in touch with you as soon as possible.
The Canadian Dollar has continued to strengthen vs Sterling and since the Brexit vote we have seen movements of over 20 cents between GBPCAD exchange rates.
This is good news for anyone looking to sell Canadian Dollars to buy Sterling but not so if you need to send money to Canada.
The problems earlier in the year involving the wildfires have done little to negatively impact the Canadian Dollar and the focus seems to be well and truly on the problems caused by the Brexit vote.
Indeed, the uncertainty surrounding the British economy in the run up to and post-Brexit is now being identified with recent economic data releases.
UK PMI data for both construction and services has seen a huge slowdown and the NIESR has recently stated that UK GDP for the last 3 months has fallen from 0.6% to 0.3%.
The Pound is extremely low against all major currencies and along with the interest rate cut by the Bank of England last week there is very little confidence in Sterling at the moment.
Indeed, deputy governor of the central bank Ben Broadbent has suggested that there could be another interest rate cut coming for the UK and arguably this is getting priced in at the moment hence the negative movements for Sterling.
It is difficult to see, at least in the short term, any respite for the Pound so if you need to send funds to Canada if you’re moving there or buying a house then it may be worth looking at getting something organised soon.
If you have a currency transfer to make and want to save money on exchange rates compared to using your own bank then contact me directly for a free quote.
Tom Holian firstname.lastname@example.org
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I wrote earlier this week about GBPCAD breaking 1.70 and so it has passed. The pound remains under pressure and the Canadian economy will continue to be supported by their main trading partner the US. The Loonie and the Canadian economy have had a rough period with the economy there flagging under the pressure of the Alberta Oil Sands fires plus the knock on impact of this event on their economy. Expectations for the future are that the price of Oil could weaken further and there is even talk of the Canadian economy slipping into recession. However as long as the US economy is performing well and their demand for raw materials keeps up I would suggest the Canadian currency will remain reasonably well supported particularly against the struggling pound.
Expectations for sterling seem to be more and more focused to the downside, further deterioration’s in the value of the pound will continue to weigh on the currency and this will make life difficult for Canadian dollar buyers with pounds. The likelihood of further falls is high and therefore if you have a requirement to buy Canadian dollars I would suggest moving sooner rather than later to try to mitigate against the expected falls. All in all markets are unpredictable but it seems that for the rest of August the likelihood is the GBPCAD rate is likely to remain in the 1.60’s. Longer term the pound may rise but I would suggest rates between 1.63 and 1.74 for the rest of Q3. If you have any transfers to consider please let me know by emailing email@example.com or calling 01494 787 478. I can help with the planning and execution of any transfers you might need.