CAD rates have been gathering strength rapidly now that the fallout from Black Monday is beginning to evapourate. For example, GBP/CAD had been as high as 2.098 but we have been catapulted back down to the levels we were seeing last week below 2.05.
The Chinese stock markets have closed 5% higher at the end of trading, giving confidence back to the stock market that the slide has stopped. As a result a lot of the money previously stored in safe-haven currencies, such as the USD and GBP, are purchasing stocks whilst the value has been cheapened massively – making massive gains on both the stock market and the inflated value of their currency exchange.
This is pushing down GBP/CAD, USD/CAD, and EUR/CAD rates, proving that recent rates were an artificial anomaly.
But a further story seems to be at play. Confidence in China is actually higher than it was before Black Monday. Commentators from JP Morgan attribute this to the steps taken by the People’s Bank of China to intervene in the economy. The base interest rate was cut and the state itself is now purchasing stocks to demonstrate its long-term commitment to its own economic stability.
Most are saying this was a long time coming, and the state’s attentiveness was received well, as such the spike against oil prices on Monday has been corrected slightly, benefiting the Canadian Dollar which is pushing CAD rates down further.
CAD rates are still at incredibly attractive buying levels. As the previous post notes, we will not be sure of its true value until the stock markets settle down over the next few weeks. But be wary that the trend is no longer moving in the favour of CAD buyers.
If you would like a free quote on your transfer feel free to contact me on 01494 787 478 and ask for Daniel. Alternatively email me on [email protected] for more tailored advice on your situation.