Why did the Canadian Dollar fall when interest rates were hiked? (Joseph Wright)

GBPEUR rate remains steady as markets await the Autumn Budget

Yesterday the Bank of Canada chose to raise interest rates for the third time in the last year.

The interest rate now sits at 1.25% and those that decide on making the decision to change interest rates have stated that this decision can be put down to increasing inflation levels, and an a strong Canadian economy.

Many economists and market traders had predicted the move and the Loonie had been increasing in the lead up to the decision, and once it was made official many took profits on their positions which put downward pressure on the currency.

The ongoing issue of the North American Free Trade Agreement (NAFTA) is also putting pressure on the Loonie as fears surrounding Trumps recent comments regarding the agreement have lead many to believe that it could be renegotiated which wouldn’t work in favour of Canada.

If the US pulls out of the agreement I believe CAD will fall sharply, and Governor Poloz has alluded to this possibility so those planning on converting Canadian Dollars should be aware of this.

If you would like to be updated should the rates move dramatically, do feel free to register your interest with me as working on a trading floor allows us to react quickly to fast price changes.

If you have a large currency exchange to carry out in the coming days, weeks or months then you are more than welcome to speak with me directly as I will be more than happy to help you both with trying to time a transaction and getting you the top market rate when you do come to buy your currency. A small improvement in a rate of exchange can make a huge difference so for the sake of taking two minutes to email me you may find you save yourself hundreds if not thousands of Pounds. You can email me (Joseph Wright) on jxw@currencies.co.uk and I will endeavour to get back to you as soon as I can.