The CAD has found support against Sterling during Tuesday’s trading, hitting a high of 1.6681.
Despite the Pound recovering to 1.67 by close of European trading it has struggled to maintain its recent upturn, losing over two cents over the past few trading days.
Whilst the UK economy continues to struggle against a wave of negative media reports and market perception, the CAD has benefited from positive comments by the Bank of Canada (BoC) Stephen Poloz.
During an interview today, he backed up comments made last week confirming that the recent interest rate cuts had done their job. This news immediately boosted investor confidence and the CAD benefitted as a result.
This move by the BoC was in part to calm global market fear about the steep fall in oil prices over the past couple of years but also indicated to some investors that the central bank may look to raise interest rates over the coming months.
Canada is one of the globes largest exporters of crude oil and as such is susceptible to a fall in price or demand. With Oil being their main export, any downturn has an instant negative effect on their economy and the CAD is likely to lose value as a result. The Loonie has also suffered of late due to the tariff introduced on Canadian lumber to the US and with three quarters of Canada’s exports heading to their nearest neighbours, any further tariffs could heap pressure on CAD.
Due to the CAD being a commodity based currency, it is heavily reliant on global growth and a such any upturn in the US & China, two of the globes largest economy can drive these currencies values up. This means that investors will look to GBP/CAD for example and see the opportunity to make more money on bigger market swings and thus, the pairs value can fluctuate quite substantially.
Oil prices have remained unsteady for months now and as such those clients holding CAD may wish to take advantage of the current market value and remove any uncertainty moving forward.
If you have an upcoming GBP or CAD currency transfer to make and 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 Matt.
Alternatively, I can be emailed directly on [email protected].