Due to the sheer volume of information and events hitting the wire at the end of this week in the UK – the Queen’s speech vote, Parliamentary debates on the new manifesto – buying Canadian Dollar rates have been largely absent much influence from Canada itself.
This should all change today with a speech from the Bank of Canada Governor Stephen Poloz.
The next interest rate decision in Canada is on July 12th, and markets are keen to know whether a rate hike will emerge. In a startling short period markets have stated there was no chance of a rate hike, with a hike now priced into the markets at 50%, which explains the rate movements so far today.
Why the sudden surge in confidence? Just yesterday the Governor stated in an official capacity that ‘rate cuts had done their job’ with markets believing the question is now when the next rate hike will emerge rather than the next cut.
Poloz certainly stirs fear in the markets given that he has twice ‘caught out markets’ but cutting rates with very little pre-warning. It seems traders aren’t taking their chances and won’t be left caught out again – so many are hedging their bets.
What does this mean for CAD buyers?
This means that if the rate hike does not manifest – which despite market anticipation still appears to be the more likely outcome, we could see a sudden improvement in Canadian Dollar buying rates. Particularly for anyone holding Sterling with the expected improvements in the UK’s political situation.
I strongly recommend that anyone with a buying or selling Canadian Dollar requirement should contact me on [email protected] to discuss a strategy for your transfer aimed at maximising your currency return and limiting the risk to your capital and being exposed to heavy market movement.
I have never had an issue beating the rates of exchange on offer elsewhere, so a brief conversation could save you significant capital on a prospective transfer.