It has been an eventful day in the currency markets with various political and economical events changing the price you pay for your currency. GBP/CAD has risen this afternoon to highs of 1.6470, mid market. USD/CAD fell following comments from the Fed to lows around 1.3280. After the initial fall following news from the US, EUR/CAD has remained fairly steady around 1.4270.
GBP/CAD exchange rate graph
CAD and USD weaken following Yellen’s comments
Yesterday evening the US raised their interest rates by 0.25% to 1.00%. This would normally give the domestic currency strength. However, this turned out not to be the case, as both the USD and because of its close relationship, the CAD, weakened following this decision.
So, why did the exchange rates fall? This was down to comments made by Fed Chair Janet Yellen in the accompanying statement. It was widely expected that the US would raise interest rates yesterday, which was therefore priced into the market already. It was also expected that there would be a further three rate hikes this year. This however was contradicted by Janet Yellen when she stated there would only be another two rate hikes.
Vote for rate hike causes sterling strength
Today we had the latest interest rate decision from the Bank of England. As was widely predicted they left interest rates on hold at 0.5%. What did surprise many was that one of the nine MPC members actually voted for a hike.
This was the first sign that the economy may be turning a corner and future rate hikes may be on the cards. This saw the GBP/CAD exchange rates move from 1.63 to over 1.6450 in a very short space of time.
Confidence back in Euro after Dutch vote
The results for the Dutch election are out and Europe gave a sigh of relief as the much safer option of Mark Rutte won the day. With other key European elections approaching fast, this was a good barometer or the anti EU felling across Europe. This gave the single currency a little more confidence, stabilising the EUR crosses slightly.
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