What will effect the Canadian Dollar short term? (Daniel Johnson)

Pound to Dollar Rate Pushed Higher by Risk-on Mood

How will the US rate hike effect the Canadian Dollar?

The US dollar actually weakened following the rate hike as Fed chair-lady, Janet Yellen had a very cautious tone when addressing the possibility of further rate hikes. Despite the possibility of a further two rates hikes this year, Yellen indicated there would have to be continued improvement in the US economy in order to justify a further hike and also have the firm belief it would not be detrimental to growth. A rise in oil price contributed to Canadian Dollar strength.

OPEC Deal in danger of Collapse

The Organisation of Petroleum Exporting Countries (OPEC) current deal to constrain oil production is in danger of falling apart. Oil has made modest gains  in price since the deal was struck, however OPEC members such as Iraq have increased oil production endangering the value of oil.

Oil is Canada’s most significant export and if OPEC members continue to ignore the limits on output the Canadian Dollar could suffer. If you have a trade involving the loonie keep a close eye on developments.

GBP/CAD – Super Thursday

Today will see the UK interest rate decision. I would be very surprised to see any change in rates due to the uncertainty surrounding Brexit. What will be of interest however is to see how the Monetary Policy Committee (MPC) voted. Nine members vote on the interest rate, last month all nine voted to keep rates on hold. If there is any change in vote this could have the potential to move markets. The rate decision is followed by the Bank of England minutes which could give an indication to monetary policy moving forward. This could well influence GBP/CAD levels.

If you have a currency requirement I will be happy to assist. You need to be working with an experienced broker during such times of volatility. I will provide a rate comparison against your current provider and also produce an individual trading strategy. I can be contacted at [email protected].