GBP/CAD Market Update (Feb 09)
Feb 5th 2009, 9:57 am
#1
BE Enthusiast
Thread Starter
Joined: Dec 2004
Posts: 524
GBP/CAD Market Update (Feb 09)
Hi All,
As requested by a number of BE regulars here's a brief update on what's happening in the currency markets and for anyone in the UK enjoy the snow!
High & Low of the Month:
High: 1.8593 (on the 16/01/09)
Low: 1.6698 (on the 26/01/09)
Difference of cost on $200k:
High: £371,860
Low: £333,960
So a difference of £37,900
While Canada’s economy is now widely believed to be in recession, the country has not experienced a real estate and financial services meltdown anywhere close to that in the UK.
Thus, despite the global downturn driving down the price of commodities, upon which Canada relies for exports, GBP/CAD has fallen by 7.8% over the course of the year. Having already breached multi-year lows/support at1.76, the near to medium term scenario remains firmly negative, particularly with Sterling technical still deteriorating. The next major support does not really arise until the 1.45-1.46 area but Sterling’s extreme over-sold situation may come to the rescue in the meantime.
GBP/CAD rallied to a one-month high mid month on the back of a lower oil price and news that the Canadian trade surplus narrowed by more than expected in November. Canada’s monthly trade surplus shrank to its lowest level in 11 years in November as oil prices plummeted and demand for Canadian commodities and other goods declined. The November trade gap fell to CAD1.28 billion, the smallest surplus since October 1997, signalling the Canadian economy may have contracted far more than expected in the fourth quarter. There was also a sharp downward revision of the October surplus to CAD2.25 billion from CAD 3.78 billion, updated on volatile energy prices and volumes.
Then, GBP/CAD slumped to a fresh 23-year low last week on the back of some broad-based Sterling weakness, whilst the Canadian Dollar benefited from a bounce in the price of oil, a key export. The CAD advanced despite the Bank of Canada cutting its key interest rate on Tuesday by 0.50% to a 50-year low of 1.00% and predicting a period of falling prices this year as an economic recession takes hold. Canada’s inflation rate was later confirmed as easing in December to 1.2%y/y from 2.0% in November as gasoline prices plunged at their fastest pace in half a century, leaving the BoC room to cut rates further if necessary. The core rate, which excludes volatile items like gasoline and better reflects underlying price trends, held steady at
2.4%y/y.
Central bank rates:
Canada (BOC) 1.00%
UK: (MPC): 1.50%
US (FED): 0.00 – 0.25%
Going forward most industry analysts expect continued volatility. No surprises there!
Whilst FX isn't the most thrilling of subjects, the sooner you begin to think about your money transfers, the more likely are to make your money go as far as you do.
Best Regards
Mark Bodega
Director - HiFX
As requested by a number of BE regulars here's a brief update on what's happening in the currency markets and for anyone in the UK enjoy the snow!
High & Low of the Month:
High: 1.8593 (on the 16/01/09)
Low: 1.6698 (on the 26/01/09)
Difference of cost on $200k:
High: £371,860
Low: £333,960
So a difference of £37,900
While Canada’s economy is now widely believed to be in recession, the country has not experienced a real estate and financial services meltdown anywhere close to that in the UK.
Thus, despite the global downturn driving down the price of commodities, upon which Canada relies for exports, GBP/CAD has fallen by 7.8% over the course of the year. Having already breached multi-year lows/support at1.76, the near to medium term scenario remains firmly negative, particularly with Sterling technical still deteriorating. The next major support does not really arise until the 1.45-1.46 area but Sterling’s extreme over-sold situation may come to the rescue in the meantime.
GBP/CAD rallied to a one-month high mid month on the back of a lower oil price and news that the Canadian trade surplus narrowed by more than expected in November. Canada’s monthly trade surplus shrank to its lowest level in 11 years in November as oil prices plummeted and demand for Canadian commodities and other goods declined. The November trade gap fell to CAD1.28 billion, the smallest surplus since October 1997, signalling the Canadian economy may have contracted far more than expected in the fourth quarter. There was also a sharp downward revision of the October surplus to CAD2.25 billion from CAD 3.78 billion, updated on volatile energy prices and volumes.
Then, GBP/CAD slumped to a fresh 23-year low last week on the back of some broad-based Sterling weakness, whilst the Canadian Dollar benefited from a bounce in the price of oil, a key export. The CAD advanced despite the Bank of Canada cutting its key interest rate on Tuesday by 0.50% to a 50-year low of 1.00% and predicting a period of falling prices this year as an economic recession takes hold. Canada’s inflation rate was later confirmed as easing in December to 1.2%y/y from 2.0% in November as gasoline prices plunged at their fastest pace in half a century, leaving the BoC room to cut rates further if necessary. The core rate, which excludes volatile items like gasoline and better reflects underlying price trends, held steady at
2.4%y/y.
Central bank rates:
Canada (BOC) 1.00%
UK: (MPC): 1.50%
US (FED): 0.00 – 0.25%
Going forward most industry analysts expect continued volatility. No surprises there!
Whilst FX isn't the most thrilling of subjects, the sooner you begin to think about your money transfers, the more likely are to make your money go as far as you do.
Best Regards
Mark Bodega
Director - HiFX
Feb 5th 2009, 11:14 am
#2
BE Enthusiast
Joined: Jan 2009
Posts: 720
Re: GBP/CAD Market Update (Feb 09)
Mark,
good information - so are you saying that we are going to be buying less CAD for our stirling in the 1st half of this year?
ss
good information - so are you saying that we are going to be buying less CAD for our stirling in the 1st half of this year?
ss
Feb 5th 2009, 11:40 am
#3
BE Enthusiast
Thread Starter
Joined: Dec 2004
Posts: 524
Re: GBP/CAD Market Update (Feb 09)
Snowshoveller
With current market volatility nothing is set in stone but we do believe there will be continued Sterling weakness against the Canadian Dollar.
Best Regards
Mark
With current market volatility nothing is set in stone but we do believe there will be continued Sterling weakness against the Canadian Dollar.
Best Regards
Mark
Mar 3rd 2009, 12:03 pm
#4
Banned
Joined: Mar 2009
Posts: 146
Re: GBP/CAD Market Update (Feb 09)
Hi All,
As requested by a number of BE regulars here's a brief update on what's happening in the currency markets and for anyone in the UK enjoy the snow!
High & Low of the Month:
High: 1.8593 (on the 16/01/09)
Low: 1.6698 (on the 26/01/09)
Difference of cost on $200k:
High: £371,860
Low: £333,960
So a difference of £37,900
While Canada’s economy is now widely believed to be in recession, the country has not experienced a real estate and financial services meltdown anywhere close to that in the UK.
Thus, despite the global downturn driving down the price of commodities, upon which Canada relies for exports, GBP/CAD has fallen by 7.8% over the course of the year. Having already breached multi-year lows/support at1.76, the near to medium term scenario remains firmly negative, particularly with Sterling technical still deteriorating. The next major support does not really arise until the 1.45-1.46 area but Sterling’s extreme over-sold situation may come to the rescue in the meantime.
GBP/CAD rallied to a one-month high mid month on the back of a lower oil price and news that the Canadian trade surplus narrowed by more than expected in November. Canada’s monthly trade surplus shrank to its lowest level in 11 years in November as oil prices plummeted and demand for Canadian commodities and other goods declined. The November trade gap fell to CAD1.28 billion, the smallest surplus since October 1997, signalling the Canadian economy may have contracted far more than expected in the fourth quarter. There was also a sharp downward revision of the October surplus to CAD2.25 billion from CAD 3.78 billion, updated on volatile energy prices and volumes.
Then, GBP/CAD slumped to a fresh 23-year low last week on the back of some broad-based Sterling weakness, whilst the Canadian Dollar benefited from a bounce in the price of oil, a key export. The CAD advanced despite the Bank of Canada cutting its key interest rate on Tuesday by 0.50% to a 50-year low of 1.00% and predicting a period of falling prices this year as an economic recession takes hold. Canada’s inflation rate was later confirmed as easing in December to 1.2%y/y from 2.0% in November as gasoline prices plunged at their fastest pace in half a century, leaving the BoC room to cut rates further if necessary. The core rate, which excludes volatile items like gasoline and better reflects underlying price trends, held steady at
2.4%y/y.
Central bank rates:
Canada (BOC) 1.00%
UK: (MPC): 1.50%
US (FED): 0.00 – 0.25%
Going forward most industry analysts expect continued volatility. No surprises there!
Whilst FX isn't the most thrilling of subjects, the sooner you begin to think about your money transfers, the more likely are to make your money go as far as you do.
Best Regards
Mark Bodega
Director - HiFX
As requested by a number of BE regulars here's a brief update on what's happening in the currency markets and for anyone in the UK enjoy the snow!
High & Low of the Month:
High: 1.8593 (on the 16/01/09)
Low: 1.6698 (on the 26/01/09)
Difference of cost on $200k:
High: £371,860
Low: £333,960
So a difference of £37,900
While Canada’s economy is now widely believed to be in recession, the country has not experienced a real estate and financial services meltdown anywhere close to that in the UK.
Thus, despite the global downturn driving down the price of commodities, upon which Canada relies for exports, GBP/CAD has fallen by 7.8% over the course of the year. Having already breached multi-year lows/support at1.76, the near to medium term scenario remains firmly negative, particularly with Sterling technical still deteriorating. The next major support does not really arise until the 1.45-1.46 area but Sterling’s extreme over-sold situation may come to the rescue in the meantime.
GBP/CAD rallied to a one-month high mid month on the back of a lower oil price and news that the Canadian trade surplus narrowed by more than expected in November. Canada’s monthly trade surplus shrank to its lowest level in 11 years in November as oil prices plummeted and demand for Canadian commodities and other goods declined. The November trade gap fell to CAD1.28 billion, the smallest surplus since October 1997, signalling the Canadian economy may have contracted far more than expected in the fourth quarter. There was also a sharp downward revision of the October surplus to CAD2.25 billion from CAD 3.78 billion, updated on volatile energy prices and volumes.
Then, GBP/CAD slumped to a fresh 23-year low last week on the back of some broad-based Sterling weakness, whilst the Canadian Dollar benefited from a bounce in the price of oil, a key export. The CAD advanced despite the Bank of Canada cutting its key interest rate on Tuesday by 0.50% to a 50-year low of 1.00% and predicting a period of falling prices this year as an economic recession takes hold. Canada’s inflation rate was later confirmed as easing in December to 1.2%y/y from 2.0% in November as gasoline prices plunged at their fastest pace in half a century, leaving the BoC room to cut rates further if necessary. The core rate, which excludes volatile items like gasoline and better reflects underlying price trends, held steady at
2.4%y/y.
Central bank rates:
Canada (BOC) 1.00%
UK: (MPC): 1.50%
US (FED): 0.00 – 0.25%
Going forward most industry analysts expect continued volatility. No surprises there!
Whilst FX isn't the most thrilling of subjects, the sooner you begin to think about your money transfers, the more likely are to make your money go as far as you do.
Best Regards
Mark Bodega
Director - HiFX
