GBP/CAD has dropped from its initial gains made this morning up to 2.095 to the high 2.07’s. The Canadian Dollar has also made robust gains against the USD before North American markets open later today.
The initial slide was due to further collapse in the North American stock-markets late yesterday. The news that had caused the USD to strengthen, and the Canadian Dollar by association, against other currencies was that the Dow had made massive gains during the day. Alarmingly these gains were, however, reversed during the final few hours of trading. So when Asian and European markets woke up this morning, the confidence gained for the Canadian Dollar the day before was countered almost immediately, with GBP/CAD rates hitting 2.08 before I’d finished my coffee.
It seems we’ll be set for a lot of volatility over the next few weeks as the stock-market re-adjusts and calms down – the lack of transparency and publication of a clear plan by the People’s Bank of China is not helping.
I am not expecting a sudden bout of Sterling weakness to cause GBP/CAD rates to catapult down in the short term. Our ties with China are minimal compared to the US, so CAD rates seem to be largely influenced by its own value over its pairings. Oil prices have taken a further hit, astounding analysts, and we will probably only get an idea of the Canadian Dollars true value over the next few weeks once the storm passes.
In the meantime, it is still an excellent time to buy the Canadian Dollar, so if you would like a free quote, or more detailed advice on your situation, feel free to email me on [email protected]