Pure FX Blog

13 July 2017

CA Dollar Hits 4-Month High Versus Pound, as BoC Lifts Interest Rates

The Canadian dollar to pound interbank exchange rate has hit its highest in 4 months today, or since March 15th, at 0.6090, as the Bank of Canada has lifted interest rates. Image credit: Jacqueline Munoz.

The Canadian dollar to pound interbank exchange rate has hit its highest in 4 months today, or since March 15th, at 0.6090, as the Bank of Canada has lifted interest rates. Image credit: Jacqueline Munoz.

by Peter Lavelle

Welcome to Pure FX’s latest update of the Canadian dollar to pound interbank exchange rate.

The loonie dollar rockets against sterling! The Canadian dollar to pound interbank exchange rate has hit 0.6090 today, its highest since March 15th, or 4 months.

The Canadian dollar has jumped, because yesterday the Bank of Canada (BoC) lifted interest rates by +0.25%, to 0.75%, the first rise in borrowing costs in 7 years.

In particular, the BoC lifted interest rates, because “growth is broadening across industries and regions and therefore becoming more sustainable,” thus lifting the Canadian dollar.

The CA dollar has risen following the Bank of Canada’s decision, first because higher interest rates signal that the central bank has greater confidence in Canada’s GDP outlook.

The BoC’s interest rate decision has also lifted the loonie dollar, because higher interest rates make investing in Canada more profitable, boosting the value of the Canadian dollar too!

Canadian dollar rises, as BoC could lift interest rates further

What’s more, the Canadian dollar has also risen against the pound, because leading economists are forecasting that the Bank of Canada will lift interest rates again later this year.

According to Douglas Porter, chief economist at the Bank of Montreal, the BoC could lift interest rates a further +0.75%, to 1.5% by mid-2018, thereby strengthening the loonie dollar.

The BoC is being tipped to hike interest rates further, as Canada’s inflation rises, as the effect of low petrol rises and electricity rebates in Ontario wears off, thus boosting the CA dollar.

This has lifted the Canadian dollar, because if the Bank of Canada lifts interest rates further, this would signal that Canada has at last recovered fully from the 2008 financial crisis.

With all this in mind, the Canadian dollar to pound interbank exchange rate has hit this 4-month high today!

Get a free Canadian dollar to pound exchange rate quote

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Please bear in mind, this article is Pure FX’s opinion only and does not constitute advice. Moreover, the exchange rates referred to in this article are the interbank rates, which are the rates at which banks and financial institutions buy and sell currency to each other. Therefore these exchange rates cannot be accessed by individuals or SMEs, and are not the same rates that Pure FX can offer. To get a free exchange rate quote, call us on +44 (0) 1494 671800, or email peter.lavelle@purefx.co.uk.

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