Rate Hike causes significant Canadian Dollar strength
The Bank of Canada (BOC) have raised interest rates for the second time running. Rates had already risen from 0.5% to 0.75% at the previous meeting and now in a shock move we have see another rise today 1%. This is a very rate and bold move as far as rate decisions go. On this occasion it can be justified however.
We have seen strong, stable growth from Canada and this has also been helped by OPEC putting a cap on global oil supply. Oil is Canada’s primary export. The Canadian Dollar is now looking very attractive to investors, a relatively safe haven currency with high returns.
Unfortunately for Canadian Dollar buyers things could well get worse. I have been talking about the dangers of hoping for an improvement and this has proved correct. Political uncertainty. Historically the currency in question weakens during a period of political uncertainty. With growing pressure on Theresa May to vacate her position as PM it does little to help the pound. Until there is a stable government the pound will have a great deal of trouble making any significant gains. Brexit is the other major catalyst for Sterling weakness as there is no clarity on the UK’s stance and there is conflict between UK negotiators and Brussels over payment of the proposed exit bill. Bad news is better than no news on the currency market.
GBP/CAD is now sitting at 1.59.
If you have a currency requirement I will be happy to assist. If you let me know the details of your trade I will endeavour to produce a free trading strategy to suit your individual needs. Have faith knowing you will be dealing with a brokerage in business for over 16yrs, Foreign Currency Direct Plc. We are a no risk entity as we do not speculate on the market and we are registered with the FCA. If you have a currency provider take a minute to send over the rates they offer and I am confident I can demonstrate a significant saving. I can be contacted at [email protected] . (Daniel Johnson) Thank you for reading.