The surprises continued from yesterday’s positive UK economic data releases. Our GDP growth for the first 3 months of 2015 came in a full 0.2% higher than expected. While that may seem miniscule, as this is a measure of entire UK economy, the figure is substantial, and was treated as such by the Currency Markets, with a Sterling rally back up against all major currencies.
Further buying opportunities for the Euro continued today for the same reason. Jeremy Stretch at CIBC World markets believes this was because some had previously underestimated the strength of the UK’s economic performance and now they’re starting to realise the potential for returns from investing in Sterling.
As such the Pound gained against the CAD and created some excellent oppotunities in the short time to buy the ‘loonie’.
What made the rates cruise into the 1.91’s for GBP-CAD, testing these 6 year-high rates even further, was a speech by Bank of Canada Governor Stephen Poloz. He said that household debt and a potential crash in housing prices remain a major concern for the Canadian economy.
In their June Financial System Review, the central bank deems this risk to Canada as ‘elevated’ as it was in the December review.
This little reminder Poloz dropped into discussions about the recent promise of the Canadian economy – which has benefitted from boosted discretionary income resulting from reduced spending on petrol and strong growth in their trade partner the U.S – sombred the recent excitement introduced to the markets about the Canadian Dollar.
I would recommend emailing me overnight if you have a requirement in CAD for the next few months I wouldrecommned emailing me overnight on [email protected] to discuss how to navigate the next few months were various forces will be pulling in both directions on GBP-CAD rates.