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Canadian Dollar gains strength following rate hike and positive comments thereafter

Thursday, July 12, 2018 9:33
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Yesterday we saw the Canadian Dollar make fairly solid gains against Sterling and most major currencies over the course of the trading afternoon.

First and foremost we did see a much anticipated interest rate hike from the Bank of Canada, moving their interest rate from 1.25% to 1.5% at the latest interest rate decision.

Many analysts had expected this, and although it did lead to a little strength for the Canadian Dollar the main reason for the further surge in value could be put mainly down to how positive the comments were in the monetary policy statement and press conference shortly after.

Most commentary before this release suggested that we would see a rate hike but the words around the hike would be fairly negative due to various concerns, inclusive of the slowing of talks over the North American Free Trade Agreement (NAFTA).

This didn’t end up being the case, in fact Bank of Canada Governor Stephen Poloz actually suggested that they may be considering further hikes later down the line but this would be reliant on economic data moving forward.

On top of this we saw an uplift in growth forecasts too, all in all it was a fairly positive hour or so all round, and this reflected in the price of GBP/CAD over the course of the afternoon.

Most analysts will now be looking towards next Friday for Canadian economic data, where we will have the release of key inflation figures coupled with Retail Sales too. Another positive afternoon may likely push GBP/CAD exchange rates back down towards and potentially below the 1.70 mark.

In my view I feel like this pairing could still drop back down below 1.70 in the next week or two, but for those looking to sell Canadian Dollars you must be wary that there is a high chance of an interest rate hike from the Bank of England on August 2nd, which may flip the trend back around again.

Should you have a currency exchange requirement in the coming days, weeks or months ahead and you would like me to assist you then you are more than welcome to contact me personally. Please feel free to email me, Daniel Wright using djw@currencies.co.uk with a brief description of what you are looking to do and I will be more than happy to get in touch with you.

The post Canadian Dollar gains strength following rate hike and positive comments thereafter appeared first on Pound Sterling Forecast.



Source: https://www.poundsterlingforecast.com/2018/07/canadian-dollar-gains-strength-following-rate-hike-and-positive-comments-thereafter/

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