CAD has found stability following the BOC’s pre-emptive decision to deploy a rate cut. This was hoping to safeguard the economy from the effects of historically low oil prices, worsened by the expected glutting effect once Iranian oil becomes available for global purchase.
The only slight spike has been by about a Cent for GBP/CAD rates following the announcement yesterday that the Bank of England may consider an interest rate hike as early as November (data permitting).
So we are faced with extraordinary buying opportunities, and finally due to a position of Sterling strength rather than purely CAD weakness. Today Retail sales for both economies will be released. With UK retail sales at 9:30 GMT and Canadian retail sales at 2:30 GMT, we expect substantial volatility throughout the day.
UK retail sales has been a strong performer in recent months, whilst the Canadian side actually contracted by 0.1% last month alone. But markets look for improvements and deteriorations as the rates already reflect positive or negative data from previous releases. Will the UK continue its strong showing – recent increases in the average wages in the UK could point to a stronger showing, so those looking to buy CAD can happily wait until the data released this morning. Should this come in worse than expected – then I would suggest calling in to receive a free quote on your transfer and not waiting for CAD data later to spoil this further.
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