Between a rock and a hard place... The talk is of a July rate hike but as we haven't sold our house yet it probably won't matter in the scheme of things, except make our house harder to sell as you say. I managed some liquid assets to go over when it was 2.20 in May and 2.26 a bit earlier, but the bulk from the property looks to be going at a lot less.

she will do anyway, otherwise she wouldn't be 'the wife'.
thanks for the reply, we may just squeeze in before sept but its going to be tight, can't believe i am hoping now for anything over $2 as it seems only 2 minutes ago i was so blase about $2.30, c'est la vie

would this hinted at rate hike help us at all?

http://www.canada.com/vancouversun/s...4fcc4b0&k=6772

I think if rates go up here (canada) then that will only make the Can $ stronger (although I could be wrong)

If it had come from the Bank of England instead of the Bank of Canada yes...while BOC continues to hike rates it makes CAD$ more attractive thereby strengthening the currency and giving us a shitty rate to change £ into CAD$.

Tomorrow may help, UK inflation is out at 9.30am anything stronger than 2.8% CPI year on year should see sterling go bid.

Chris

My weekly email

Loonie helped by economic and rate outlook

From $2.0950 at the beginning of last week the Pound rallied to $2.12 on Tuesday before falling back. It drifted lower until Friday lunchtime and then dropped to $2.0850 at the end of the day. This Monday morning Sterling was trading a little higher that but still short of $2.09.

At the beginning of last week the market could not give two hoots for the US Dollar. Interest rates were going nowhere but (eventually) down. Syria declared its intention to abandon its currency's peg to the US Dollar. Federal Reserve Chairman Ben Bernanke muddied the waters when he said a) that the US economy will recover from its slow start to the year and b) that the sickly housing market will be a drag on growth "for somewhat longer than expected". The market, in true Eeyore mode, focused on the second aspect of his prediction. And then, on Thursday, the doomsayers underwent a Damascene conversion and flocked buy Dollars. Why? Because, all of a sudden, word went round that US rates could go up as well as down. Bond yields went up and long-term investors ploughed into the market to fill their boots. There was more of the same on Friday morning until the move ran out of steam. The market recovered its poise over the weekend but there could be more excitement when this week's inflation figures are released.

Most analysts are still looking for the Bank of Canada to raise interest rates this summer, maybe as soon as July. The hawkish statement from the BoC a week earlier remains valid and the economic data - such as they were last week - continue to point in that direction. The Loonie could not muster the previous week's level of enthusiasm but it held onto its support, helped by that underlying expectation of higher yields in a month or two's time.

Sterling's defining moment was when the Monetary Policy Committee left the Bank Rate unchanged at 5.5 per cent on Thursday. Ninety per cent of economists had correctly forecast that the MPC would do precisely that but it did not prevent the usual round of buying ahead of the announcement, just in case. Also as usual, it was followed by a round of dumping when rates remained unchanged. Investors set their alarms for midday on Thursday the fifth of July and looked around for something else to do in the meantime. The fact that nothing happened last Thursday does not in itself diminish the possibility of a move in July or August. Beyond that here is still even a chance that base rates could hit 6 per cent before they turn lower. But that is in the future. After last week's relative disappointment it will take a little while before investors' enthusiasm is cranked back up.

So what to do?

The momentum of the Loonie was not so obvious last week but the trend remains downward. Buyers of the Canadian Dollar should cover at least half of their requirement in the forward market.

Merv King (Chairman of BOE) made comments tonight hinting at further hikes from Bank of England, watch the CPI numbers tomorrow(9.30am). Anything above 2.8% year on year could cause a short term rally, anyone sitting waiting to change up, tomorrow may be a golden opportunity.

Chris

very intersting post, Danny. Sorry to sound thick, but what does this mean in layman's terms?:

Buyers of the Canadian Dollar should cover at least half of their requirement in the forward market.

Aggghhh, but i just made my first change yesterday morning and moved some savings across before it got any worse

Oh well, nothing i can do now until my house ocmpletes on July 3rd and i move the rest. Fingers crossed.

It means they are sitting on the fence, cover half here means they are advising clients that have to buy CAD$(change £ into CAD$) to do at least half here incase the rate moves lower. But to keep a bit incase the rate improves a bit.

came in at 2.5% so inflation is slowly coming back down...i think the weaker £ against the CAD$ will continue i'm affraid.

Chris

I think I've given up for this summer and am looking at short-medium term UK investments with my capital instead whilst we go over to Canada with the minimum required to sustain ourselves. We're house-sitting/renting for a bit when we get there so no immediate need for housing funds.

Nothing ever goes as planned, eh

At last it has gone back up $2.10 now

Hey - its nice not seeing a zero after the decimal point isn't it! Now a two after that decimal point would make my day!!!

For all those folks watching the exchange rates here is some food for thought...

Yes, at 2.09 the rate seems pretty low compared to what we have had over the last few months. But have a look over the historical GBP:CAD exchange rates since 1970! Although in January 1981 the rate hit 2.87 (imagine that!), in February 1985 it hit 1.46 (oh my god!). The average over the 37 year period is about 2.18. So basically it could go either way. For all those waiting for the rate to improve before you convert I would probably just convert, be grateful you got better than 1.46 and never, ever look at the rates again.