The Canadian Dollar came under sever pressure yesterday with the sustained drop in oil price which was exaggerated on Wednesday this week to the lowest levels since 2009.
GBP/CAD rose to 3 month highs, EUR/CAD is the same, and USD/CAD is now at fresh 10 year highs.
This oil price fall is a dramatic reaction following a recent meeting for OPEC which was designed to lower oil production worldwide and help to bring prices under control. The announcement of this meeting was originally why oil prices had rallied in recent months and a major factor as to why the Canadian Dollar had strengthened against its counterparts on the currency markets.
Much of that recent strength has now been lost and the Canadian Dollar is an incredibly cheap currency to buy once more.
The real question now is whether oil prices will be recovering in the short term. This is unlikely – the December period normally causes a lag in oil demand as families and businesses slow down and their fuel requirements diminish.
So these fantastic buying opportunities on the Canadian Dollar should be around until at least January.
Buying levels will likely be effected more by events outside of Canada. Today the UK’s interest rate decision will see GBP/CAD likely as the largest mover on the markets.
While it does have the potential to be a non-event with little impact on the markets, there could be some strong movements if the vote-split for a rate hike changes from the current 8-1 split against a hike on the Bank of England Monetary Policy Committee.
With the recent announcement by the Bank of England that the UK will not be raising rates until at least 2017, it seems that there is more risk than opportunity held in the vote split – should it go to a clear 9-0 against a hike, Sterling value will plummet as the day continues.
If you have a currency transfer to make and want to save money on exchange rates compared to using your own bank then contact me directly for a free quote. Tom Holian [email protected]