If you are looking to buy Canadian Dollars (CAD) you are best off using a safe and established currency broker which offers a fair exchange rate, regardless of how Canada’s trade tussle with the US will turn out.
Ideally, the currency exchange service you use should stick to the midmarket or interbank rate – the standard rate banks charge each other – with as low a mark-up as possible. Any exchange fees should also be fair.
However, many services are not transparent about how much they profit from relatively unfavourable exchange rates, and fees may also be opaque. Banks tend to be especially notorious for this.
If you want to exchange a large amount of currency for your own use, the best way to do so is through an established currency broker. These offer the best balance of security, price and speed. You can view our list of recommended currency brokers through this link.
In the worst case, a bank’s exchange rate could cost you up to 10 times as much as that of a currency broker.
You could also use a digital currency exchange platform such as Wise, which exchanges currency at the midmarket rate. It charges a tiered fee that tapers down in accordance with the amount of money you transfer (1.19% for 100 GBP to CAD, 0.41% for 1000 GBP to CAD).
We recommend using a platform such as Wise only for smaller amounts of money, as unlike traditional currency brokers it is not possible to contact an account executive or dealer directly by phone should you face any issues.
If you want to speculate on currencies such as CAD, as opposed to simply exchanging money for your own use, the best way to do so is probably through as foreign exchange (FX) broker. These offer far more features for those looking to take advantage of short-term price movements.
You can view our list of the best FX brokers and trading platforms through this link.
Why buy CAD
Earlier this week the value of the Canadian Dollar dropped to a 21-year low against the US dollar, after US President Donald Trump committed his administration to imposing a 25% additional tariff on imports from Canada.
The CAD fell as low as 1.48 to 1 US dollar following the announcement of the new tariff on Saturday 1 February. Adding to concern among traders, Canada also threatened to impose import tariffs of 25% on the US in retaliation.
However, the CAD has since recovered to 1.43 to 1 US Dollar as of 5 February, after Trump agreed to hold off implementing the import tax for 30 days.
For speculators, the uncertainty around the value of the Canadian Dollar, which is tied to the expected overall strength of the Canadian economy, could present an opportunity.
If the crisis will ultimately be resolved, then it might make sense to buy CAD at its current price and sell if an agreement is reached which bolsters their value relative to other currencies. Or else simply hold on to them for the time being.
However, there is also the possibility that tariffs are ultimately imposed or the diplomatic situation between the US and Canada worsens, which would again likely hurt the latter country’s currency.
Robin has more than six years of experience as a financial journalist, most of which were spent at Citywire, and covers the latest developments in the investing, trading and currency transfer space. Outside of work, he enjoys reading literature and philosophy and playing the piano.
You can contact Robin at robin@goodmoneyguide.com
