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By Matthew Tait

American GDP figures are due out today at 1.30pm London time. This is a very important data release and is one of the biggest movers of the currency market.  

If the figures show a good amount of growth for the US economy we should see the US Dollar strengthen.  If you have a US Dollar purchase to make, it may be worth considering taking out a forward contract.

 The Canadian Dollar has not held up well versus the British pound in the first month of 2011. We have seen Sterling rise from 1.53 to over 1.59 against the ‘Loonie’, meaning a difference of $6,000 on a transfer worth £100,000.

However, since the US is the primary export market for Canada, a strong set of results for the US economy could set the exchange rates back toward where they were at the start of the year.

Current Interbank Exchange rates: GBP/USD 1.58 GBP/CAD 1.58

Big two days for the Canadian Dollar:

US GDP figures due out at 1.30pm (GMT) today (Friday 28th)

CAD GDP figures due out at 1.30pm (GMT) Monday (Monday 31st)

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By Matthew Tait

The pound took a tumble in early trading this morning as the much anticipated GDP (Gross Domestic Product) figures shocked the markets with a 0.5% contraction against expectations for 0.5% growth.

Sterling was trading down 1.3% against the US Dollar on the day meaning a difference of $1,300 on a purchase worth £100,000.

Not only do these figures bode ill or the UK economy, but they indicate that interest rates may have to stay low for longer than expected.  When interest rates rise it adds value to that currency, when they fall or are perceived as less likely to rise than previously, the value of the currency decreases.

All eyes will be watching for the release of the Bank of England meeting minutes tomorrow (Wednesday 26th) at 9.30am, to get an indication of their intentions for the months ahead.

Losses could be compounded at 3pm on US data releases

Today at 3pm London time, the US will release figures for Consumer Confidence and House Prices which are seen as keen indicators of economic health. The US economy seems to be in a better state than the UK’s and strong American figures this afternoon could compound the morning’s losses. 

If you have a currency requirement, contact us via our enquiry form and an experienced Currency Broker will be in touch to help you with your currency concerns.

By James Matthews

There is a raft of American data out today that could really move the market. Continuing Jobless Claims and Existing House Sales are the two data release most likely to effect the US Dollar today.

In yesterday’s trading we saw how Jobless figures can really swing major currency pairs as the UK saw negative Jobless figures cause Sterling weakness against most major currencies. I wouldn’t be surprised to see this echoed in the US this afternoon when jobless figures are released at 13.30 GMT. As the USA struggles to find its’ feet after the recession Jobless figures are a key indicator of just how quickly American’s can expect to return to a ‘normal’ booming economy.

Existing Home Sales are also due for release at 13.30 and with dissapointing Housing Starts figures yesterday how these figures come out could prove vital for short term strength or weakness on the US Dollar. As stated previously on this blog the Housing Industry has lead the American economy out of the majority of recessions in living memory and it hasn’t proved the case so far this time round. Bearing in mind the current climate these figures could give the market particular volatility today.

If you have any Dollar requirement fill in one of our enquiry forms and an experienced Currency Broker will be in touch to keep you updated on market movements.

By Matthew Tait

Ealier this month the Canadian Central Bank kept interest rates at 1%, as was widely expected. The reason for this decision seems to have been mostly influenced by the relentless strength of the Canadian dollar and the country’s relatively weak economic growth and high unemployment.

However, the strength of the dollar is perceived to be hampering Canada’s ability to maximize on its exports potential by keeping prices prohibitively high for overseas importers. Since the start of the year Sterling has gained 5 cents against the Canadian Dollar with most of this increase seen in the second week of January. The rise in the interbank price from 1.53 to 1.58 means a gain of CAD $10,000 for anyone making a currency purchase of £200,000.

The Canadian dollar has benefited over the past couple of years from rising commodity prices such as gold and oil which have been seen as a safe haven for investors looking to protect their assets in a time of economic uncertainty and a general lack of confidence in all world currencies. So, if the Canadian economic data improves and commodity prices remain high expectations will increase for an interest rate hike which could bring about strong gains in the value of the CAD, eyes will be on the Canadian Leading Indicators data due out this morning at 1.30pm GMT.

However, the outlook at the moment makes me feel that that Sterling will continue its rise and test resistance at around 1.60 in the short term.

By James Matthews

The Canadian interest rate decision is due at tomorrow afternoon at 2 p.m. There is little expecting a change as inflation currently sits at a very comfortable 1.4%.

Compare this to other worldwide economies, for instance the UK – expected to be the first of the ‘big four’ economies (USA, UK, Europe and Japan) to raise rates, where inflation sits at a booming 3.3%. Foreign Exchange rates are irrevocably linked to interest rates and as interest rates rise so will the attraction of currencies to investors. For this reason alone it is likely that the CAD may struggle against the likes of GBP this year and to a lesser extent USD.

If you have a Canadian Dollar requirement, to either buy or sell fill in one of our enquiry forms and a specialist Currency Broker will be in touch.