Over the last couple of weeks we have seen the GBP/CAD exchange rate fall from highs of around 1.8620 back down to the lows at the beginning of this week of around 1.8150. In today’s report we will look at what has caused these movements, where the exchange rates may be heading and how to get the best exchange rates.
Sterling to Canadian Dollar outlook
Sterling has been performing very well recently against the Canadian Dollar as over the last 12 months the GBP/CAD exchange rates have risen over 20%.
It looked like the exchange rates were only heading in one direction. Over the last couple of weeks however, the Canadian Dollar has clawed back some of the lost ground from the Pound. The reason for this is that Canada’s economic data showed widespread improvement such as domestic employment, which in turn added to the expectations of an interest rise in the near future.
The recovery did not last long however as an unexpected fall in business confidence caused the GBP/CAD rates to fall. Although it did show that despite a sketchy economic outlook, companies were fairly confident about hiring in the near future.
Where are the GBP/CAD exchange rates heading?
After the drop in GBP/CAD exchange rates the Pound has already started to rise again. So far this week we have had some very strong UK data. We have seen Manufacturing, Industrial Production and Trade Balance figures all come out above their forecasts. That coupled with the latest results from the BoE MPC meeting, which showed the Bank of England have no intention of pumping more funds into stimulus packages such as Quantitative easing any time soon and there was a unanimous vote to keep interest rates on hold.
This just outlines the fact that the UK economy is still recovering a lot faster than it’s counterparts, meaning in the short to medium term, the exchange rates are likely keep to the current upward trend. If you are looking to sell Canadian Dollars in the near future, it may be wise to move sooner rather than later.
This should not be taken for granted as the Bank of Canada have indicated they will have to start thinking about a rate hike soon and with the BoE governor reiterating the fact raising interest rates in the UK to soon would be a bad move for Sterling. For those if you looking to move funds out of sterling, it is the perfect time to use “Stops and Limits” contracts to make the most of the recent gains, while protecting ou from any falls against you.
How to get the best exchange rates
If you are looking for the best exchange rates then open a trading facility today. This does not cost or obligate you in any way but gives you access to a dedicated team of currency specialists, very competitive rates of exchange and various contracts to suit every currency requirement.
This will allow you to keep one step ahead of the market movements, ensuring you are making the most of your money. In just the last couple of weeks a typical transfer of $100,000 CAD would cost you an extra £1400 between the highs and the lows.
If you have any questions or you would like a free quote on your currency, contact us today. Alternatively, email us directly on [email protected]