Manufacturing disappointing for Sterling

We have seen a great deal of volatility over the past week in the GBP/CAD exchange rates and it does not look like that is changing any time soon. Sterling to Canadian Dollar rates have been trading between 2.045 and 2.075 over the last seven days. To put this into real terms, a typical transfer of £200,000 would see you receive a difference of around $6000 CAD between the highs and the lows of just the last weeks trading. If you would like to find out how to make the most of your currency, get in touch with me directly on the details below.

China slow down

Over the past week China has ceased trading shares twice, as pre-determined levels were triggered to stop a shares crash after a 7% fall in the market. This has caused huge uncertainty in the global markets and many fear it will kick off a 2008 style global recession.

Both the UK and Canada have suffered because of this, with the FTSE taking a huge hit after last weeks crash and Canada’s dependence on commodity exports weighing heavily on the currency.

Manufacturing disappointing for Sterling

After a very quiet start to the week with only some minor data out from Canada on Monday, causing little movement, today we have some more meaningful figures to look at.

There was no data realises from Canada today but the UK had the first of the weeks important inflation data, as well as a speech by Bank of England Governor, Mark Carney. The UK manufacturing production figures were forecast to show modest growth of 0.1%. The actual figure showed a decline of -0.4%, which was a big blow for the pound and builds the case for the BoE to leave interest rates on hold further. This caused the GBP/CAD exchange rates to fall over two points this morning.

Where are the GBP/CAD exchange rates heading?

With the Price of Oil still hitting record lows in recent days and some predictions for it to drop much further to around $18 a barrel, the Canadian economy is suffering greatly. The slow down in China has also had a large effect on the commodities based currency as they are importing less Canadian commodities such as Oil.

It is now rumoured the Bank of Canada may look at reducing interest rates again, as the economic outlook seems set to fall further amongst fears of a global economic slowdown, encouraged by the woes in China.

You would be forgiven for thinking the Canadian Dollar can only get cheaper to buy but this may not be the case. Towards the end of last year Sterling gained ground against a basket of major currencies, as speculation that they would raise interest rates mounted. Since then it has become apparent that wage growth and near zero inflation is keeping the prospect of a rate hike firmly grounded.

Now that many predictions are for UK interest rates to be held for the next 18 months, Sterling may fall back against its counterparts. Its largest trade partner, Europe is still struggling and its second largest trade partner is China, which may be on the brink of a huge slow down.

With all this in mind it is almost impossible to say where the exchange rates will be next week, let alone a long term prediction. For this reason it is very wise to keep in close contact with your FCG account manager to keep up to date with the latest market movements and discuss how the up and coming releases may effect your currency purchase.

How to buy my currency

If you have an up and coming currency purchase and are looking for the best exchange rates, get in touch for a free quote on the details below.

We offer various contract to suit every need and with such uncertain times, you can lock into a rate of exchange foe up to two years into the future. This means you can budget effectively and won’t get any nasty surprises if the exchange rates move.

If you would like any further information on any of the contracts we offer, or just want to find out how we could save you money, contact me for a free, no obligations discussion about your needs.

Opening a trading facility only takes a couple of minutes online and does not cost or obligate you in any way. Just click the link and get started today.
Richard BeaumontWritten by:
Richard Beaumont
T: 01442 892 060
E: [email protected]