Phil Gull

Ian,

What is your view on the likely direction of the C$ / Euro rate ? And, roughly what spread to midmarket would your firm charge for purchasing Euros with C$ ?

Thanks.

Ian_Daly

Good morning Phil,

Firstly thanks for getting in contact and if I can ask you a couple of questions I would be happy to discuss the likely direction for CAD / EUR.

What is the amount you would be looking to exchange and do you have date for which it needs to be completed by?

All the best

Ian

Phil Gull

This is just a general enquiry to compare to my current options. I've just moved to ireland so the amount to convert is significant.
Thanks,
Phil

Ian_Daly

Good afternoon Phil,

That's no problem I can send you the quote via pm however with regards to the outlook for CAD to EUR please see below. I'm originally from Ireland myself, I use to live in Dublin, where about's have you moved too?
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Recently the Canadian dollar fell versus most of its 16 major peers for a third week, the longest streak since June, on concern the 16-day U.S. government shutdown added to economic headwinds for the country’s largest trading partner.

The currency rose against the U.S. dollar on speculation the 16-day closure may lead the Federal Reserve to delay tapering its bond-buying program. A government report recently showed inflation remained at the low end of the Bank of Canada’s target band. The central bank is forecast to retain its 1 benchmark interest rate target at a policy meeting Oct. 23. Traders are assigning no probability for the central bank to raise its benchmark rate.

With inflation so low and uncertainty in the U.S. economy, there is simply not enough growth for the Bank of Canada to start normalizing policy. Most believe that until we see better economic releases domestically and the central bank takes a more hawkish approach any potential for the CAD to gain ground is unlikely.

Bank of Canada Governor Stephen Poloz said last week that growth has “disappointed” and the economy is operating below the level the central bank expected six months ago. The bank predicted in July that inflation will stay below its 2 percent target until the second quarter of 2015.

“September’s slightly weaker-than-expected core inflation reading is consistent with the increase in economic slack over the past year,” David Madani, an economist at Capital Economics Ltd. wrote in a note to clients. “With the Bank of Canada’s export-led recovery hopes likely to face even more delays, most expect underlying inflation to remain muted over the remainder of this year.”

The economic landscape in the U.S and Canada is full of uncertainty, and the same concerns about growth in the U.S. have tainted the Canadian outlook, most believe that if inflation data continues to come in on the soft side, this will give the Bank of Canada cover to be more dovish.

Overall I would expect to see the CAD/EUR rate weaken in the medium term then in the short term I would think the same will happen however there may be some unexpected spikes along the way that you could possibly take advantage of.
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The main reason why I asked about your timeline is that if you let me know what date you have in mind for when you need to start transferring then I can guide you on a weekly basis, which personally I feel is the best way to tackle the most volatile market in the world.

If you or anyone else has any questions then please do not hesitate ask.

All the best

Ian
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