The Canadian Dollar spiked upwards yesterday for a number of reasons, gaining just under 2% against the US Dollar and over half a per cent against the British Pound.
As many readers will already be aware, the Canadian Dollar is heavily pegged against the value of oil as Canada is one of the world’s largest exporters of oil, therefore big swings in its value can have a profound effect on the value of the Loonie (Canadian Dollar). Yesterday the value of oil was boosted after the Organisation of the Petroleum Exporting Countries (OPEC) announced the date for their planned oil output freeze, and also lower U.S. crude inventories were announced boosting demand and therefore the commodity’s value.
CAD’s gain’s against the US Dollar were further boosted by the US Federal Reserve Open Market Committee (FOMC) statement as comments were dovish, reducing optimism towards the US economy and these sentiments were compounded by a dovish Janet Yellen (FED Chairwoman) as well, weakening the US Dollar and further benefiting CADUSD.
The UK’s growth forecasts being revised downwards from 2.4% to 2% aided the Loonie’s gains against the Pound, and this morning GBPCAD is trading almost a percentage point down continuing yesterday’s negative trend.
I expect this trend to continue in the short-term for the Canadian Dollar as oil continues to rebound and the Canadian economy improves, but should a significant oil oversupply be announced I envision a drop in CAD’s value along with the value of crude oil per barrel (currently trading at $39.58).
If you have an upcoming currency requirement involving the Canadian Dollar, the British Pound, or any other major currency for that matter, it’s well be worth your time getting in contact with me (Joseph Wright) on firstname.lastname@example.org in order to ensure you make a well informed decision on when to make that particular transfer, as well as benefiting from highly competitive exchange rates from one of the UK’s leading foreign currency brokerages. Just provide me with a basic outline of your currency requirement and I will be back in touch with you as soon as possible.