GBP/CAD rates fell this week following a weak showing for Sterling on Thursday, where it seemed the timeline for a rise in the base interest rate in the UK was delayed significantly.
Just before the weekend employment figures also came in, reflecting a strong showing for Canada after a poor run recently. While only 6000 jobs were added last month, the population of Canada must be taken into account. With only half the population of the UK, these figures were enough relatively to spell CAD strength heading into the weekend.
Normally, currency exchange rates ‘correct’ themselves slightly after a violent swing in any direction, as those looking to transfer in the opposite direction (in this case sell CAD) are presented with better opportunities. Seizing those opportunities weakens the selling currency. These strong employment figures for the Canadian economy were enough to prevent the correction after Thursday, and keep rates firmly in the 2.03’s.
I am expecting further CAD strength this week. Overnight today retail sales data for the UK economy will be released at 00:00 GMT, which will likely reflect poorly as we saw a contraction in this sector at the tail end of last month, and cause GBP/CAD rates to drop off. Furthermore, on Tuesday an annualized reading for new homes built in Canada for the year will be released. With Friday’s data release of building permits increasing 15% last month alone, when only 5% was expected, it indicated this release will bode well for CAD sellers when it comes out at 13:15 GMT Tuesday.
Should this data all come in as expected, we may see GBP/CAD rates testing the 2.01 boundary by the end of Tuesday. Those looking to buy CAD should do so while the rates are still artificially in your favour from lowered oil prices. Contact me on 01494 787 478 for a free quote on your transfer.