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CAD cheaper to buy despite poor UK figures
So far this week we have seen the pound fall against most major currencies but the sterling to Canadian dollar exchange rates have been the exception.
In today’s report, we will look at what is causing both the exchange rates to move from both sides of the GBP/CAD cross.
Poor UK data effecting the pound
So far this week this week sterling has not been performing well at all. After the long bank holiday weekend, sterling has fallen against a basket of major currencies, making it more expensive to buy your property or goods abroad.
Things kicked off Tuesday when we saw the latest Manufacturing MPI Data. Not only did this fail to meat the forecast figure of 51.3, it actually showed a contraction as the numbers came in at 49.2. This caused the pound to weaken greatly against its counterparts. Wednesday, sterling has not faired any better as the latest Construction numbers also failed to meet expectations, coming in at 52.0 below the 54.1 forecast.
This was very bed news for sterling and with the up and coming EU referendum in the UK, we could see the pound weaken further. This fall however has not been mirrored in the GBP to CAD exchange rates.
Canadian Trade Balance
Despite some very poor figures from the UK, the sterling to Canadian dollar exchange rates have risen over the past two days, making it cheaper to buy the Loonie.
The reason for the weakening CAD is partly down to a rather dovish speech by the Bank of Canada Give Poloz on Tuesday. However, the main cause of the Loonie’s decline was today’s trade balance figures. These were expected to show a mild contraction of -1.2B, which given the reduced demand in oil among other factors, this was expected.
When the actual figures showed a huge contraction of 3.4Bn, the markets reacted quickly and the Canadian dollar weakened off against most major pairings, including the pound.
What has this done to the exchange rates?
Despite some very poor data from the UK, so far this week the GBP/CAD exchange rates has risen from around 1.83 to just under 1.86, making it a lot cheaper to buy the Canadian dollar. To put this into real terms, a typical house purchase of $250,000 has on average, reduced in price by around £1150 every day so far this week.
With the up and coming EU referendum, and the poor UK data recently, you may be wise to take advantage of the recent gains as the current exchange rates may not be available for long.
Take advantage of our commercial rates of exchange
If you have an up and coming currency requirement and would like to find out how these releases are affecting the price of your currency purchase, get in touch today. We offer all types of contracts to suit every need and allow you to lock into a rate of exchange for up to two years into the future. This allows you to plan ahead and budget effectively.
Opening a trading facility does not cost or obligate you in any way and only takes a couple of minutes online. Alternatively, if you just want a free quote on your currency purchase, contact me directly on the details below or complete the enquiry form.
T: 01442 892 060