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It has been a very volatile year so far for global exchange rates and the Sterling to Canadian Dollar cross has been no exception. In today’s report, let’s look at what data releases and events may effect the exchange rates this week.
Data effecting the Canadian Dollar
There are very few points of interest for the Canadian Dollar this week, with only some minor data releases. These will however give clues as to the health of the Canadian economy as a whole.
We start the week with the latest monthly building permits. These are an excellent indicator of future construction activity an gaining a permit is often the first step in any construction project. Later today we have a speech from BoC Council Member Lane, titled “Monetary Policy and Financial Stability – Using the right tools” in Montreal. This could cause a movement in the exchange rates as he may give hints of any future plans to tackle Canada’s flagging economy.
The only other news coming from Canada is in the form of the monthly New Home Price Index. This shows the change in selling price of any new homes and is forecast to show a positive growth of 0.3%. If this figure strays too far from the forecast, we could see some volatility in the markets.
Data effecting the price of Sterling
After “Super Thursday” last week, it is a surprisingly quiet week for Sterling but there is still plenty that could change the amount you pay for your currency.
With nothing out today it will be news from overseas that move the exchange rates at the start of the week. Tuesday we have BRC Retail Sales Monitor followed by trade balance figures later in the afternoon. This will show the difference in value between the imported and exported goods during the last month. This is forecast to show a deficit of around 10.4Bn. If this figure worsens, we could see the BoE try and deliberately weaken the currency in order to boost exports. Since every country seems to be playing the same game, this has been deemed ineffective by many.
Wednesday we finally see some meaningful data coming from the UK when the latest Manufacturing production figures are released. These are a good indicator of economic health and will have a large effect on the markets. This is forecast to be flat at 0.0%.
With the UK inflation sitting around zero and wage growth failing to show any positive signs, the Bank of England are having a great deal of trouble raising interest rates. If the Manufacturing figure come in better than expected, this could be a well needed boost for the Pound.
There is only minor data for the rest of this week but anyone expecting a relatively quieter time in the currency markets has not been paying attention lately.
Up and Coming events moving exchange rates
One factor that I suspect we will hear a lot more about in the news in the coming weeks and months is the EU referendum in the UK. Only time will tell how the UK will vote with regards to staying in Europe. We can’t even say how the markets will react to either outcome. One thing we can be sure of however, is that volatility is certain.
If we look back to the Scottish Independence vote in the UK, it was very similar. Throughout the build up, many months before the decision was being made, the markets were very uncertain. This caused huge swings in the exchange rates and the up and coming EU referendum, is likely to be just as volatile.
Do you or your business have a currency requirement?
If you or your company have an up and coming currency purchase, it is important to stay in touch with one of our specialists to keep up to date with the market movements.
Any piece of economical or political news can effect the exchange rates dramatically and therefore the amount you pay for your currency. Your dedicated account manager will discuss all the options available to you, so you can choose the correct contract for your requirements.
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