Rate Hike by 0.25%
The Bank of Canada yesterday raised rates from 0.5% to 0.75%. This has been the first rise in rates in seven years. The justification for the hike was strong growth across all industries and there is confidence that these levels can be sustained. Sterling has weakened against the Canadian Dollar as a result now sitting at 1.64.
Stephen Poloz the Governor of the Bank of Canada has stated however that there is no intention for further hikes for the foreseeable future, the rate will be dictated by economic data, particularly inflation and I think wew ill have to see a significant movement in order to warrant any further hikes.
Inflation levels are currently sitting below the Bank of Canada’s target of 2% and this hike has come as a somewhat surprise and the markets have reacted accordingly.
Why raise rates when Oil is falling heavily in price?
It is a surprise that they have mad such a hike when oil prices are tanking. Oil is Canada’s biggest export, making up 20% of all exports. OPEC are struggling to keep a lid on supply. With OPEC members flooding the market and devaluing oil this could mean big trouble for the Canadian dollar.
If you have a large currency transfer to perform in the coming days, weeks or months then I will be happy to speak to you directly as I will be willing to help you both with trying to time a transaction and getting you the best possible rate when you do come to trade. A small improvement in a rate of exchange can make a significant difference so for the sake of taking a few minutes to email me you may find you save yourself hundreds if not thousands of Pounds. You can contact me (Daniel Johnson) on [email protected] and I will endeavor to get back to you as quickly as possible. Thank you for reading.