Why has the exchange rate gone up so much lately.
Jan 10th 2014, 6:46 pm
#31
BE Forum Addict
Joined: Sep 2010
Location: Maryland (via Belfast, Manchester, Toronto and London)
Posts: 4,802
Re: Why has the exchange rate gone up so much lately.
Looks like a combination of factors:
http://business.financialpost.com/20...-analysts-say/
The Canadian dollar’s fall is based in part on the strengthening U.S. economy and the Bank of Canada’s dropping of the tightening bias to weaken the loonie, said Blake Jespersen, BMO Capital Markets’ managing director of foreign exchange.
With Bank of Canada governor Stephen Poloz looking unlikely to hike interest rates until 2015, expect a bumpy ride for the loonie until then, he said.
“I think Canadian companies and consumers will have to adjust to a weaker Canadian dollar,” Mr. Jespersen said. “I just don’t think the economy nor commodity prices, nor interest rates warrant a Canadian dollar above US95¢. So I think we could be trading between US88¢ and US95¢ over the coming year.”
After hovering near parity in recent years, the loonie has seen a steep sell-off in recent months. Friday’s dismal job numbers was another blow with the Canadian dollar weakening immediately after the data was released to a session low of 91.62 U.S. cents.
With a strong U.S. economic performance and employment outlook likely to spur the U.S. Federal Reserve to continue tapering its bond-buying program, keeping the U.S. dollar on strong footing against mundane Canadian economic data, the fundamentals point to a continued slide for the Canadian dollar before it stabilizes in the second half of the year, said Camilla Sutton, chief foreign exchange strategist for Scotiabank.
http://business.financialpost.com/20...-analysts-say/
The Canadian dollar’s fall is based in part on the strengthening U.S. economy and the Bank of Canada’s dropping of the tightening bias to weaken the loonie, said Blake Jespersen, BMO Capital Markets’ managing director of foreign exchange.
With Bank of Canada governor Stephen Poloz looking unlikely to hike interest rates until 2015, expect a bumpy ride for the loonie until then, he said.
“I think Canadian companies and consumers will have to adjust to a weaker Canadian dollar,” Mr. Jespersen said. “I just don’t think the economy nor commodity prices, nor interest rates warrant a Canadian dollar above US95¢. So I think we could be trading between US88¢ and US95¢ over the coming year.”
After hovering near parity in recent years, the loonie has seen a steep sell-off in recent months. Friday’s dismal job numbers was another blow with the Canadian dollar weakening immediately after the data was released to a session low of 91.62 U.S. cents.
With a strong U.S. economic performance and employment outlook likely to spur the U.S. Federal Reserve to continue tapering its bond-buying program, keeping the U.S. dollar on strong footing against mundane Canadian economic data, the fundamentals point to a continued slide for the Canadian dollar before it stabilizes in the second half of the year, said Camilla Sutton, chief foreign exchange strategist for Scotiabank.
Jan 10th 2014, 8:04 pm
#32
Just Joined
Joined: May 2012
Posts: 17
Re: Why has the exchange rate gone up so much lately.
I cannot believe the figures...this is probably the worst time ever to be moving back to UK with Canadian dollars!!!!!! 
Jan 10th 2014, 8:05 pm
#33
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Joined: Aug 2013
Location: Maple Ridge, Super Natural British Columbia
Posts: 2,071
Jan 10th 2014, 10:38 pm
#35
Grumpy Know-it-all
Joined: Jul 2010
Location: Calgary, Alberta
Posts: 8,928
Re: Why has the exchange rate gone up so much lately.
Date 1 GBP -> CAD 1 CAD -> GBP
2013-12 1.74275500 0.57380412
2013-11 1.69047000 0.59155146
2013-10 1.66818636 0.59945341
2013-09 1.64247500 0.60883727
2013-08 1.61456190 0.61936306
2013-07 1.57809091 0.63367706
2013-06 1.59775500 0.62587819
2013-05 1.55924091 0.64133771
2013-04 1.55964091 0.64117323
2013-03 1.54475500 0.64735185
2013-02 1.56233158 0.64006899
2013-01 1.58311818 0.63166478
2012-12 1.59764211 0.62592241
2012-11 1.59183333 0.62820647
2012-10 1.58731818 0.62999341
2012-09 1.57750526 0.63391231
2012-08 1.56014091 0.64096774
2012-07 1.58044286 0.63273404
2012-06 1.59910476 0.62534990
2012-05 1.60708636 0.62224410
2012-04 1.58866000 0.62946131
2012-03 1.57256818 0.63590248
2012-02 1.57505238 0.63489952
2012-01 1.57190000 0.63617278
2011-12 1.59525000 0.62686099
2011-11 1.61967143 0.61740917
2011-10 1.60759500 0.62204722
2011-09 1.58078571 0.63259681
2011-08 1.60781364 0.62196263
2011-07 1.54345000 0.64789919
2011-06 1.58407727 0.63128234
2011-05 1.58237619 0.63196097
2011-04 1.56867500 0.63748068
2011-03 1.57794783 0.63373451
2011-02 1.59277000 0.62783704
2011-01 1.57044000 0.63676422
2010-12 1.57293333 0.63575485
2010-11 1.61538095 0.61904902
2010-10 1.61503500 0.61918163
2010-09 1.61044286 0.62094721
2010-08 1.62937143 0.61373360
2010-07 1.59522857 0.62686941
2010-06 1.53240455 0.65256919
2010-05 1.52542000 0.65555716
2010-04 1.54125714 0.64882100
2010-03 1.54037391 0.64919302
2010-02 1.65064000 0.60582562
2010-01 1.68570000 0.59322537
2009-12 1.71183810 0.58416739
2009-11 1.75801500 0.56882336
2009-10 1.70993810 0.58481649
2009-09 1.76548571 0.56641636
2009-08 1.79690000 0.55651400
2009-07 1.83649545 0.54451537
2009-06 1.84380909 0.54235550
2009-05 1.77671000 0.56283805
2009-04 1.80097143 0.55525589
2009-03 1.79100000 0.55834729
2009-02 1.79443000 0.55728003
2009-01 1.77269524 0.56411276
2008-12 1.83425238 0.54518125
2008-11 1.86586842 0.53594347
2008-10 1.99404091 0.50149422
2008-09 1.90148095 0.52590587
2008-08 1.98491000 0.50380118
2008-07 2.01354545 0.49663642
2008-06 1.99923333 0.50019174
2008-05 1.96531429 0.50882447
2008-04 2.00890455 0.49778373
2008-03 2.00627000 0.49843740
2008-02 1.96193333 0.50970132
2008-01 1.99073636 0.50232669
2007-12 2.02421579 0.49401848
2007-11 2.00167143 0.49958249
2007-10 1.99409091 0.50148165
2007-09 2.06962632 0.48317901
2007-08 2.12703636 0.47013771
2007-07 2.13772381 0.46778728
2007-06 2.11610952 0.47256533
2007-05 2.17311364 0.46016922
2007-04 2.25570000 0.44332136
2007-03 2.27482727 0.43959382
2007-02 2.29266000 0.43617457
2007-01 2.30349091 0.43412370
2006-12 2.26347368 0.44179882
2006-11 2.17366667 0.46005214
2006-10 2.11761429 0.47222953
2006-09 2.10256000 0.47561068
2006-08 2.11699545 0.47236757
2006-07 2.08288500 0.48010332
2006-06 2.05308636 0.48707157
2006-05 2.07171818 0.48269113
2006-04 2.02292632 0.49433338
2006-03 2.01853913 0.49540779
2006-02 2.00790500 0.49803153
2006-01 2.04644762 0.48865165
2005-12 2.02767000 0.49317690
2005-11 2.04819048 0.48823584
2005-10 2.07840500 0.48113818
2005-09 2.12747619 0.47004051
2005-08 2.16160455 0.46261931
2005-07 2.13976000 0.46734213
2005-06 2.25430000 0.44359668
2005-05 2.32943333 0.42928895
2005-04 2.34359524 0.42669484
2005-03 2.31766818 0.43146815
2005-02 2.33970500 0.42740431
2005-01 2.30013500 0.43475709
2004-12 2.35015714 0.42550346
2004-11 2.22675238 0.44908451
2004-10 2.25382500 0.44369017
2004-09 2.31018095 0.43286652
2004-08 2.38751429 0.41884566
2004-07 2.43824762 0.41013062
2004-06 2.48192273 0.40291343
2004-05 2.46462500 0.40574124
2004-04 2.41848571 0.41348187
2004-03 2.42592174 0.41221445
2004-02 2.48288000 0.40275809
2004-01 2.36340476 0.42311838
2003-12 2.29852381 0.43506184
2013-12 1.74275500 0.57380412
2013-11 1.69047000 0.59155146
2013-10 1.66818636 0.59945341
2013-09 1.64247500 0.60883727
2013-08 1.61456190 0.61936306
2013-07 1.57809091 0.63367706
2013-06 1.59775500 0.62587819
2013-05 1.55924091 0.64133771
2013-04 1.55964091 0.64117323
2013-03 1.54475500 0.64735185
2013-02 1.56233158 0.64006899
2013-01 1.58311818 0.63166478
2012-12 1.59764211 0.62592241
2012-11 1.59183333 0.62820647
2012-10 1.58731818 0.62999341
2012-09 1.57750526 0.63391231
2012-08 1.56014091 0.64096774
2012-07 1.58044286 0.63273404
2012-06 1.59910476 0.62534990
2012-05 1.60708636 0.62224410
2012-04 1.58866000 0.62946131
2012-03 1.57256818 0.63590248
2012-02 1.57505238 0.63489952
2012-01 1.57190000 0.63617278
2011-12 1.59525000 0.62686099
2011-11 1.61967143 0.61740917
2011-10 1.60759500 0.62204722
2011-09 1.58078571 0.63259681
2011-08 1.60781364 0.62196263
2011-07 1.54345000 0.64789919
2011-06 1.58407727 0.63128234
2011-05 1.58237619 0.63196097
2011-04 1.56867500 0.63748068
2011-03 1.57794783 0.63373451
2011-02 1.59277000 0.62783704
2011-01 1.57044000 0.63676422
2010-12 1.57293333 0.63575485
2010-11 1.61538095 0.61904902
2010-10 1.61503500 0.61918163
2010-09 1.61044286 0.62094721
2010-08 1.62937143 0.61373360
2010-07 1.59522857 0.62686941
2010-06 1.53240455 0.65256919
2010-05 1.52542000 0.65555716
2010-04 1.54125714 0.64882100
2010-03 1.54037391 0.64919302
2010-02 1.65064000 0.60582562
2010-01 1.68570000 0.59322537
2009-12 1.71183810 0.58416739
2009-11 1.75801500 0.56882336
2009-10 1.70993810 0.58481649
2009-09 1.76548571 0.56641636
2009-08 1.79690000 0.55651400
2009-07 1.83649545 0.54451537
2009-06 1.84380909 0.54235550
2009-05 1.77671000 0.56283805
2009-04 1.80097143 0.55525589
2009-03 1.79100000 0.55834729
2009-02 1.79443000 0.55728003
2009-01 1.77269524 0.56411276
2008-12 1.83425238 0.54518125
2008-11 1.86586842 0.53594347
2008-10 1.99404091 0.50149422
2008-09 1.90148095 0.52590587
2008-08 1.98491000 0.50380118
2008-07 2.01354545 0.49663642
2008-06 1.99923333 0.50019174
2008-05 1.96531429 0.50882447
2008-04 2.00890455 0.49778373
2008-03 2.00627000 0.49843740
2008-02 1.96193333 0.50970132
2008-01 1.99073636 0.50232669
2007-12 2.02421579 0.49401848
2007-11 2.00167143 0.49958249
2007-10 1.99409091 0.50148165
2007-09 2.06962632 0.48317901
2007-08 2.12703636 0.47013771
2007-07 2.13772381 0.46778728
2007-06 2.11610952 0.47256533
2007-05 2.17311364 0.46016922
2007-04 2.25570000 0.44332136
2007-03 2.27482727 0.43959382
2007-02 2.29266000 0.43617457
2007-01 2.30349091 0.43412370
2006-12 2.26347368 0.44179882
2006-11 2.17366667 0.46005214
2006-10 2.11761429 0.47222953
2006-09 2.10256000 0.47561068
2006-08 2.11699545 0.47236757
2006-07 2.08288500 0.48010332
2006-06 2.05308636 0.48707157
2006-05 2.07171818 0.48269113
2006-04 2.02292632 0.49433338
2006-03 2.01853913 0.49540779
2006-02 2.00790500 0.49803153
2006-01 2.04644762 0.48865165
2005-12 2.02767000 0.49317690
2005-11 2.04819048 0.48823584
2005-10 2.07840500 0.48113818
2005-09 2.12747619 0.47004051
2005-08 2.16160455 0.46261931
2005-07 2.13976000 0.46734213
2005-06 2.25430000 0.44359668
2005-05 2.32943333 0.42928895
2005-04 2.34359524 0.42669484
2005-03 2.31766818 0.43146815
2005-02 2.33970500 0.42740431
2005-01 2.30013500 0.43475709
2004-12 2.35015714 0.42550346
2004-11 2.22675238 0.44908451
2004-10 2.25382500 0.44369017
2004-09 2.31018095 0.43286652
2004-08 2.38751429 0.41884566
2004-07 2.43824762 0.41013062
2004-06 2.48192273 0.40291343
2004-05 2.46462500 0.40574124
2004-04 2.41848571 0.41348187
2004-03 2.42592174 0.41221445
2004-02 2.48288000 0.40275809
2004-01 2.36340476 0.42311838
2003-12 2.29852381 0.43506184
Jan 11th 2014, 5:12 pm
#36
finally together...
Joined: Oct 2008
Location: Prince George, BC
Posts: 811
Re: Why has the exchange rate gone up so much lately.
So I've got some cash in uk and looking to move it over, as deposit for our house, do I do it now the rate is highest we've seen (been here 18m) of wait a few months and be reasonably safe it's not going down to 1.50 again any time soon?
Jan 11th 2014, 5:39 pm
#37
BE Forum Addict
Joined: Apr 2005
Location: Saskatoon, Saskatchewan
Posts: 4,104
Re: Why has the exchange rate gone up so much lately.
Cameron will be doing everything he can to fake a good economy until the election, so it's unlikely to drop that low again until afterwards.
Jan 11th 2014, 6:22 pm
#38
Just Joined
Joined: Jan 2010
Location: BC
Posts: 28
Re: Why has the exchange rate gone up so much lately.
If you have large amounts of funds in UK account when moving to Canada then likely you will need access to it, or at least a portion of it.
My strategy is to keep funds in their respective currencies as much as possible and withdraw at times I feel it is advantageous. Also because I sometimes purchase products from US or UK and is good to be able to transact without currency exchange getting in the way.
I don't try to second guess what interest rates, or exchange rates will be as the economies and interest rates are manipulated as opposed to being as they say "cyclical". Much (as has previously been said) is based on debt, but I would say more distinctly government debt. It is the public's ignorance of how the money creation system works that fuels the need for increasing taxes, indirect taxing and fees.
My strategy is to keep funds in their respective currencies as much as possible and withdraw at times I feel it is advantageous. Also because I sometimes purchase products from US or UK and is good to be able to transact without currency exchange getting in the way.
I don't try to second guess what interest rates, or exchange rates will be as the economies and interest rates are manipulated as opposed to being as they say "cyclical". Much (as has previously been said) is based on debt, but I would say more distinctly government debt. It is the public's ignorance of how the money creation system works that fuels the need for increasing taxes, indirect taxing and fees.
Jan 11th 2014, 10:13 pm
#39
Born again atheist
Joined: Jul 2005
Location: Europe (to be specified).
Posts: 30,259
Re: Why has the exchange rate gone up so much lately.
Now, I'm perfectly used to the contentless rhetoric routinely employed by politicians and economists, but could anyone offer a hint as to what that gobbledegook might mean?
Jan 11th 2014, 10:16 pm
#40
BE Forum Addict
Joined: Apr 2005
Location: Saskatoon, Saskatchewan
Posts: 4,104
Re: Why has the exchange rate gone up so much lately.
It's all just banker BS, really.
Jan 11th 2014, 11:11 pm
#41
BE Enthusiast
Joined: Sep 2010
Posts: 415
Re: Why has the exchange rate gone up so much lately.
I'm going to try and make my transfer on Monday, and then promise myself never to check the rates ever again!
Jan 12th 2014, 1:22 am
#42
Joined: Sep 2008
Posts: 12,830
Re: Why has the exchange rate gone up so much lately.
If the rate was $1.50 when you became tax resident and you exchange at $1.80, you should be reporting the capital gain on your 2014 tax return.
If you had £100000 and exchange at $180,000, you have a gain of $30,000, half of which is taxable at your marginal rate.
http://www.cra-arc.gc.ca/tx/ndvdls/t.../menu-eng.html
Jan 12th 2014, 2:46 am
#43
Born again atheist
Joined: Jul 2005
Location: Europe (to be specified).
Posts: 30,259
Re: Why has the exchange rate gone up so much lately.
The Bank of Canada have been pretending they might increase interest rates, thereby keeping up the value of the Canadian dollar. Now they're pretending they might not increase interest rates, thereby reducing the value of the Canadian dollar to people who'd been buying it on the belief that rates would go up.
It's all just banker BS, really.
It's all just banker BS, really.
I think banker bullshit (although the quote was apparently from a commentator) is likely right.
Jan 12th 2014, 10:20 pm
#44
finally together...
Joined: Oct 2008
Location: Prince George, BC
Posts: 811
Re: Why has the exchange rate gone up so much lately.
It's an inheritance and I got it about a month before we got pr but 18m after we became tax residents. My accountant says it's not taxable as it was would have been taxed at source in uk if eligible.
It will of course be declared but is not massive so shouldn't be significant even if tax is due.
It will of course be declared but is not massive so shouldn't be significant even if tax is due.
Nothing about FX is safe. Take a rate you are happy with rather than one you are forced to take.
If the rate was $1.50 when you became tax resident and you exchange at $1.80, you should be reporting the capital gain on your 2014 tax return.
If you had £100000 and exchange at $180,000, you have a gain of $30,000, half of which is taxable at your marginal rate.
http://www.cra-arc.gc.ca/tx/ndvdls/t.../menu-eng.html
If the rate was $1.50 when you became tax resident and you exchange at $1.80, you should be reporting the capital gain on your 2014 tax return.
If you had £100000 and exchange at $180,000, you have a gain of $30,000, half of which is taxable at your marginal rate.
http://www.cra-arc.gc.ca/tx/ndvdls/t.../menu-eng.html
Jan 13th 2014, 1:17 am
#45
Joined: Sep 2008
Posts: 12,830
Re: Why has the exchange rate gone up so much lately.
It's an inheritance and I got it about a month before we got pr but 18m after we became tax residents. My accountant says it's not taxable as it was would have been taxed at source in uk if eligible.
It will of course be declared but is not massive so shouldn't be significant even if tax is due.
It will of course be declared but is not massive so shouldn't be significant even if tax is due.
If it is over $100,000 CAD, you also should have filed a T1135 with your tax return. Very important not to miss this (costly if you miss it and should have filed one).
Say you received £100,000 2 years ago, BOC FX rates $1.57
http://www.bankofcanada.ca/rates/exchange/ (CRA use these rates).
You exchange the funds to CAD and get $1.79, your gain is 22c or $22000, you would be taxed on $11,000. Also any interest you have received reportable reportable to CRA.
Regardless of whether funds are taxed overseas or not, you still need to report them if the source is taxable in Canada and then claim a credit for foreign tax paid, if there is a reciprocal agreement. It is a bad idea to just assume there is no tax due as you paid elsewhere and not report it.