Foreign Exchange - UK Daily Update - Tuesday, October 14, 2008 14:41 - 0 Comments

Canadian Dollar Strains as Risk Aversion Bites – World First – Canadian Update – 14th October

Canadian Dollar Strains as Risk Aversion Bites 

 

Canadian Dollar weakened dramatically over the last week and continues to trade at weaker levels following the rush to safety amid the global crisis. Canadian Dollar is now trading at around the 2 level against Sterling and at 1.13 in the cross with USD, where earlier in the month it was trading at 1.03. This is primarily because investors consider US Treasuries as the ultimate safe haven and have therefore flooded back into dollars.

Midweek saw the coordinated global interest rate cut that Canada was involved in, witnessing a lowering of its Central bank interest rate to 3.00% from the earlier 3.50%. Commodity prices were also lower over the week, with Crude Oil dipping well below the $90 per barrel mark.

Risk aversion will continue to weigh on the downside for Canadian Dollar this week but expect to see some strength as the fog clears from the crisis at foot. Whether or not this occurs in the near term we will wait to see

 

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Corporate Foreign Exchange Team on 020 7801 9050 or our Private Client Currency Exchange Team on 020 7801 9080.

 

Disclaimer: The above comments are only our views and should not be construed as advice. You should act using your own information and judgement. Although information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy and it may be incomplete or condensed. All opinions and estimates constitute the author’s own judgement as of the date of the briefing and are subject to change without notice.

Any rates given are “interbank” i.e. for amounts of £5million and thus are not indicative of rates offered by World First for smaller amounts. E&OE. Definitions of jargon/market terms can be found in our Glossary of Foreign Exchange Terms.