A multitude of factors have come together today to allow the Pound to gain a further 2.5 cents against the Canadian Dollar in a single day of trading. To put this in perspective, between the high and the low of today a $200,000 purchase was £1,300 cheaper to achieve on a well timed transfer!
Firstly, investors fearful of a volatile Greek crisis has moved into safer currencies such as Sterling, which has artificially boosted its value due to increased demand. This began immediately this morning.
Secondly, disappointing figures from the US housing market indicated a slowdown in the US economy. As Canada’s economy is so closely linked with its neighbour, this had a knock-on affect on the value of the Canadian Dollar as well, weakening alongside the USD throughout the day.
Thirdly, it seems the GDP data for May in Canada. which will be released at 13:30 GMT tomorrow, may be expected to come in lower than expected, which is reducing confidence in the Canadian Dollar. But this is only an educated guess due to the staggering reduction in the value of the Canadian Dollar today, will will know more early in the afternoon tomorrow.
So for those looking to sell the CAD unfortunately the fates have colluded against you today, both indirectly and directly to make any potential sale very unappealing. Those looking to buy CAD however, have been presented with fresh 7 year highs which should be considered seriously by anyone who will have requirements before the end of the year.
First of all, as the first point notes, these rates are largely artificial (if you are buying the Canadian Dollar with Sterling). As such there is no reason to believe these rates will be available in the long term (I would say differently if these rates were a result of staggeringly positive Data releases concerning the British economy). Furthermore, the Canadian economy seems to have ‘bottomed out’, so you are unlikely to get further weakness from that end of a GBP/CAD transfer.
Those looking to buy CAD should email me overnight on email@example.com to discuss how to get the best rate possible while the market has peaked. Even if your requirements are not until later in the year, you can peg the rates as they currently are at no cost, which I would strongly recommend at this point – contact me to get details on the various ways this can be done.
Furthermore, those looking to sell CAD should do the same, depending on the timescale you have for the transfer some selling opportunities could be outlined to make sure you maximise the value of your Canadian Dollars in a down market.