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GBP/CAD December 09 Currency Update

GBP/CAD December 09 Currency Update

Old Dec 3rd 2009, 2:02 pm
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Default GBP/CAD December 09 Currency Update

Hi All,

Here is an update of what’s been happening in the Currency Markets throughout November with the Canadian Dollar.

The beginning of the month saw GBP/CAD capitalise on disappointing Canadian GDP figures, putting the Bank of Canada’s forecast for third-quarter growth in doubt. Canada’s gross domestic product shrank by 0.1% in August which means that the Bank of Canada’s forecast for annualised growth of 2.0% in the third quarter looks unrealistic and may therefore remove any lingering talk of an early interest rate hike. BoC Governor Mark Carney told a parliamentary committee that the BoC is happy with its current policy stance, signalling he did not expect to have to take special steps to tame the CAD’s strength and boost economic recovery.

The CAD did strengthen, on the back of a rising gold and oil price, but quickly gave up after Canadian jobs data showed an unexpected drop in employment, ridding hopes of a quick economic rebound. The economy lost 43,200 jobs in the month after two months of gains, pushing the jobless rate up to 8.6% from 8.4. Figures also revealed Canada’s trade deficit narrowed sharply in September from a record gap in August, thanks in part to a comeback in auto exports and growing sales to non-US markets. The trade shortfall shrank much more than expected, to CAD927mln from CAD1.99bln in August (during the global recession, Canadian exporters have been hit with much weaker demand).

The consumer price index rose 0.1% in the year to October, mainly due to less downward pressure from petrol prices and as consumers paid more for food, household goods and services. It was the first upward movement since May, in a sign that the Canadian economy is pulling out of a recession (Core inflation also came in higher than expected at 1.8%, up from 1.5% in September). Retail sales data was also better than expected; sales grew twice as much as expected in September as consumers ramped up their spending on a wide range of goods. Sales jumped 1.0% from August, with the biggest gains in the auto sector and at supermarkets, but trade was still down some 3.3% from a year earlier.

Current Central Bank Rates:

Bank of Canada: 0.25%% (Next meeting 3rd December)
UK (Bank of England): 0.50% (Next meeting 10th December)

GBP/CAD Highs & Lows of November:

High: 1.7899
Low: 1.7265

A movement of: 3.67%

Difference this would make on £200k

High: 357,980 CAD
Low: 345,300 CAD

A difference of 12’680 CAD.

Whilst FX isn't the most thrilling of subjects, the sooner you begin to think about your money transfers, the more likely you are to make your money go further.


Mark Bodega
Director - HiFX
Windsor2 is offline  

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