This slide on CAD has become surprisingly sustained. Previous slides on the oil prices normally saw CAD’s value stabilise within one or two business days. This 3 day loss which has seen GBP/CAD for example rise by over 4 cents as the Canadian Dollar weakens has instead set a new precedent.
I must also point out that during December you do tend to get more exaggerated movements on the markets as trading thins in the run-up to the holidays. Large and isolated transactions can move the exchange rates (which are essentially an average between the buying and selling prices) dramatically, which explains the degree to which the fall in oil prices has translated into Canadian Dollar weakness.
However, this doesn’t account for why this has followed onto 3 consecutive days, and from the way rates are moving this morning may follow on to a fourth.
It seems that with no conclusion following the recent OPEC meeting on output quotas for the oil industry, it seems that long-term confidence for a recovery in the oil market is waning.
Frankly, the value of the CAD would be falling even further if other areas of the economy were not performing so well. Yesterday house prices in Canada were showing a healthy rise whilst efficiency readings for the economy were outshining that of the US and the UK.
Those with Canadian Dollars to buy should now be looking to ride any further moves in their favour which may occur in December as this news persists, and companies reform their positions based on the expectation of prolonged low oil prices.
One option is to put what is called a ‘limit order’ in the market. If you have a reasonable and desired rate of exchange to be achieved, within the next few months then an automatic order can be placed into the market which will allow you to secure your currency as soon as your target level is reached.
The current market is so volatile that target rates are achieved and lost in very short periods of time. For example – GBP/CAD has moved from 2.073 down by half a cent to 2.068 whilst I have been writing this piece. An automatic order ensures you do not miss out on tempting rates of exchange whilst your are sleeping or unavailable to make a transaction.
For more information on how to implement this, and for discussions on current CAD forecasts to get an idea of what a reasonable target level to achieve is, then email me on [email protected] to talk over a strategy for your transfer.
Those with CAD to sell can also reach me for a free and competitive quote to transfer. I have never had an issue beating the rates of exchange offered elsewhere, and biting the bullet may save you the pain of expensive movements against your favour in the run up to January.