Mixed week for GBP/CAD exchange rates
It has been a mixed week for the Sterling to Canadian Dollar cross with exchange rates falling below for the first time this year, before recovering to around 2.02. There has been no data of relevance from Canada so far this week but the UK has seen several releases move the exchange rates.
Monday saw the latest Manufacturing PMI data. This came in above forecast of 51.8 at 52.9 and started the Pound on an upward trend, pushing exchange rates back through the 2.0 level. Construction PMI was the next to be released on Tuesday which actually missed expectations by a large margin. The Pound was once again bolstered by the latest Services PMI which came in above forecasts.
With such mixed Inflation data through out the start if the week, the GBP/CAD exchange rates have been fluctuating throughout this time from lows of around 1.99 to recent highs of over 2.03. To put this into real terms a typical house purchase of $250,000 would cost you a difference of around £2500 in just three days.
The real action for the week is still to come as the most important data of the week is being released Thursday and Friday.
Tomorrow should bring some volatility if nothing else with what the media have dubbed “Super Thursday”. At mid day tomorrow we will have the Bank England Inflation report. This is followed by the interest rate decision and accompanying minutes which show how the nine MPC members voted with regards to interest rates and future stimulus packages. There will also a statement afterwards by BoE governor Mark Carney.
This information used to be released throughout the month with the information on how the MPC members voted not coming until a couple of weeks after the interest rates decision. This means there is now a lot more to digest but we have more information and therefore gives a clearer picture of the health of the economy and the future chances of a rate hike etc.
The week ends with some very influential data from Canada. We will see Employment Change and the Unemployment Rate, giving a good indication of the health of the economy. Trade Balance figures will also be released, which show the difference between imported and exported goods. Given Canada’s recent slump in its main export, Oil and struggling manufacturing sector, this is not likely to impress.
How does this effect me?
So far this year the Sterling to Canadian Dollar exchange rates have fallen from highs of around 2.09 to lows of around 1.99 and with such uncertain times they could move in either direction. When purchasing a property abroad these movements can change the amount you are paying dramatically.
We allow you to lock into a rate of exchange for up to two years into the future. This means you can budget effectively and not get caught out if the exchange rates move against you.
Alternatively, with the use of “Stops and Limits” you can target a better rate than is available, while protecting yourself if the market moves away from you.
If you would like to find out more information about how we can help you, open a free, no obligations trading facility today. Alternatively, if you just want a free quote on your currency purchase, contact me directly on the details below.