The Canadian Dollar held on relatively well compared to the USD, GBP, EUR, and AUD during trading overnight and morning trading in Europe. Poor factory orders in China has fuelled concerns about future global growth, which has spurred a mass sell-off of stocks as a result – this is no longer the kind of slow-down which only affects commodity based currencies like the CAD, AUD and somewhat the US Dollar – this is starting to affect financial centres as well.
China’s factory orders for August fell at the fastest pace in more than 6 years, reflecting poor domestic and international demand for their goods. The recent devaluation of the Yuan over three consecutive days was previously seen as a precautionary measure to make sure their exports will continue to be competitive…the release of this data suggests it is much more reactive than previously though. This suggests China’s situation will worsen further before it improves.
Previously news about China’s slowdown had only affected economies who were dependant upon commodity exports, such as Canada, Australia, and to a lesser extent the US. However, this sharp decrease in demand has also caused shock-waves in the stock-market, so financial centres such as the UK and the US are also feeling the affects. As such, CAD rates have improved overnight and during this mornings trading session. GBP/CAD has fallen in favour of CAD buyers, as well as USD/CAD and EUR/CAD (to a lesser extent).
The start of trading in North America will see the release of inflation data for the Canadian economy. One of the better performers in the Western world for inflation, even with falling oil prices, positive data in at atmosphere of poor global outlook today will surely spell strength for the CAD across the board.
I strongly suggest those with Canadian Dollars to buy in the short-term to get in contact for a competitive quote on your transfer on 01494 787 478.