The Canadian economy has been showing better than expected growth recently and this has led the Canadian Dollar to strengthen during the last few days.
Canadian growth during April showed an improvement and this has kept the hopes alive that we could be seeing an interest rate hike coming potentially at this month’s meeting.
With such a bad start to the year with the weather, this particular set of data has shown a big improvement and therefore the next meeting due to be held on July 11th could potentially see a rate hike.
If this does take place it will be the fourth rate hike in the last 12 months which would bring the interest rate up to 1.5%, bringing it closer to that of the US which has clearly seen a huge benefit, having raised interest rates 7 times since December 2015.
One sticking point for the Canadian Dollar is that of the ongoing Trade Wars with Canada imposing CAD$13bn worth of tariffs on foreign goods.
Currently Donald Trump has been suggesting that there could be tariffs imposed on the automotive industry and this could have a very large negative impact on the Canadian Dollar.
Also, the issue of NAFTA is still rumbling on and with a new Mexican President having been inaugurated recently I think this could delay the talks which could create further uncertainty for the Canadian Dollar.
In the short term I think we could see the CAD strengthen vs the Pound but longer term if the NAFTA talks drag on I think this could cause some real problems for the Canadian Dollar towards the end of this year.
We end the week with Canadian Trade Balance figures as well as the Unemployment rate, so expect a busy end to the week if you’re making a currency transfer involving Canadian Dollars.
If you have a currency transfer to make and would like to save money when buying or selling Canadian Dollars then email me directly using [email protected], I look forward to hearing from you.