Will the Canadian Dollar stop losing ground?
The Sterling to Canadian Dollar exchange rates seem to have been on a one way path so far this year. Is the time finally here for the rates to level out? Recent events have seen the advance of Sterling and the US Dollar slow and we could now see the exchange rates reverse.
Starting the year, the GBP/CAD rates were around the 1.80 level mid market and have since rocketed to recent highs in late august of around 2.0950. This has partly been down the British economy growing a lot faster than its counterparts and the rumors of a rate hike in the horizon. The main cause however, was down to massive falls in Oil and Energy prices effecting the commodities based economy of Canada.
Since the Canadian Dollar hit the lows against both Sterling and the US Dollar in late august, we have seen a slow in the currency free fall and the exchange rates appear to have levelled out. Even before the latest peaks, the Bank of Canada were trying to tackle the on going problems. July saw the Bank of Canada half there interest rates to 0.5% in an effort to stabilize things. This was one of the factors that weakened the currency but should be viewed as a good thing for the economy in the long term.
What has strengthened the Loonie against its counterparts recently was the news that not only did the BoC decide to keep rates on hold at their latest meeting, but they assured there should be no need for further cuts in interest rates. The previous interest rate cuts are now working and the temporary depreciation in the currency has helped the struggling economy.
This could be the turnaround the Loonie needed so those with an up and coming purchase should keep in close contact with their FCG account manager
When should I buy my currency?
If you were holding off on your Canadian Dollar purchase hoping to catch the peak, it may be wise to take advantage of your recent gains. The GBP/CAD rates now appear to have levelled off and you are trading close to the highest levels in eight years.
For those of you wanting to sell Canadian Dollars and move your funds back to Sterling, be wary. The threat of Oil prices falling further and the likelihood of a rate hike from both the US and the UK, the exchange rates could easily move against you.
If you need a free quote on your currency purchase or would like to find out more about our contracts and how we may be able to help, contact us today. Opening a trading facility does not cost or obligate you in any way and only takes a couple of minutes online. Click the link to get started today.
Oil prices still a worry.