GBP-CAD Rates holding steady as morning trading begins (Joshua Privett)

GBP to CAD Rate: Sterling Gains Against the Canadian Dollar Ahead of Bank of Canada Statement

A quiet end to the week for data releases has seen CAD exchange rates hold steady as trading begins this morning, suggesting a stable day for rates on the cards.

But the long-term stability of the Canadian economy was called into question overnight on two fronts. As the post below notes, the head of the Bank of Canada talked about a potential housing crisis. While the threat is low, bothering to mention one at all was enough for some investors to leave the CAD and cause GBP-CAD rates to hit 1.91 yesterday.

The dire situation for the oil industry in Canada has also been highlighted overnight. Insurance companies are pushing riskier packages to offshore oil companies. Due to low oil prices, oil companies are deemed very risky to insure, so insurance companies are having to take on more risk in order to get any business at all. Essentially, a ‘bubble’ could emerge and this is what Canada’s most powerful financial services regulator is worried about.

After the financial crisis many are still ‘touchy’ over future bubbles emerging. So the threat is still low, but it simply highlights how bad the current situation in Canada is.

This also emphasises that it is unlikely these rates at their current 6 year highs could go up any further. There are long-term threats of bubbles bursting, but history has proved that oil prices will rise before this threat becomes significant enough to fret over.

Those looking to buy CAD in the next 12 months should call into the trading floor on 01494 787 478 to discuss your options on how to peg these historic rates. Even if the funds are not available now, you can eliminate the uncertainty for your transfer and budget more effectively. Or email me on [email protected]