The pound has made instant gains against the Canadian dollar as news has broken that Republican candidate Donald Trump has won the US Presidential election. GBP CAD has gained over 1% on the news. As it happens the pound has fallen against most currencies but has in fact made good gains against the Canadian dollar, Australian dollar and New Zealand dollar.
This is because these currencies are commodity currencies and normally perform badly in times of global economic and political uncertainty. The price of oil is also another factor which determines the strength of the Canadian dollar and this is expected to be volatile. The thing is the new President will not be inaugurated until 20th January. Questions also now arise over what the US Fed will do with interest rate hikes. A December hike as originally expected is not looking like the most likely option all of a sudden.
Economic data today will almost certainly be overshadowed by this historic news today. Clients who have a Canadian dollar exposure would be wise to get in touch as high volatility is expected with more to follow when the US market opens. Friday sees a speech from Bank of Canada Governor Poloz which could create some added volatility for the Canadian dollar and he will no doubt look to calm the markets.
The Brexit jitters will no doubt keep the pressure on the pound but this Presidential outcome should present some major swings in the markets which is likely to create opportunities for clients buying and selling Canadian dollars alike. . If you would like to be kept up to date with all the latest market movements, or simply wish to compare our award winning exchange rates with your current provider, then please feel free to contact me on 0044 1494 787 478 and ask one of the team for James. Alternatively, I can be emailed directly on [email protected]