Oil price drop leads to further weakness for the Canadian Dollar (Daniel Wright)

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The Canadian Dollar dropped off a little in trading yesterday, as investors and speculators dropped off some of their bullish bets (in favour of Canadian Dollar strength) due to the drop off in oil prices witnessed yesterday afternoon.

At one point oil prices were down by 2% and although the tight link between the Canadian Dollar and oil prices is not as tight as it has been in recent times it still does have an impact on the price of CAD as we saw over the course of the day.

Canadian Government bond prices were up a tiny bit and as the week progresses we have Canadian manufacturing figures due out tomorrow and key inflation data out on Friday.

Analysts are expecting to see another hike in interest rates from the Bank of Canada early in 2018 and should any news come out that alters that view then we may see the Canadian Dollar weaken off a little more. We also need to remember that should we have news to bolster the chances of a rate hike in Canada then you would expect the Canadian Dollar to gain back some strength.

In my opinion, I feel that the Canadian Dollar may weaken a little further from its current position and that another hike in early 2018 may be a little too early, but it will be interesting and extremely important to see how the market reacts to inflation data out later in the week.

If you have Canadian Dollars to either buy or indeed sell then we can help you carry this out in this fairly choppy market. You are welcome to get in touch with me (Daniel Wright) directly by emailing djw@currencies.co.uk with a brief overview of your needs and I will be more than happy to contact you personally to discuss the options you have and explain how I can assist you.