Brexit Vote Results in Stronger Canadian Hog Prices

CANADA - The Director of Risk Management with [email protected] Marketing Services says the impact of last week's Brexit vote in Great Britain on the value of the Canadian dollar has been positive for Canadian pork producers but it has created a great deal of volatility.
calendar icon 4 July 2016
clock icon 3 minute read

Last week's referendum to decide whether the UK should leave or remain in the European Union, in which more than 30 million people or over 70 per cent of eligible voters cast ballots, resulted in 52 per cent to 48 per cent decision to leave.

Tyler Fulton, the Director of Risk Management with [email protected] Marketing Services, says the Canadian dollar has seen some significant volatility as a result.

Tyler [email protected] Marketing Services:

What's happened really since the Brexit vote, or the vote that Great Britain had last week on whether or not to leave the EU, has added a lot of uncertainty to financial markets around the world and, as a result, there's been a sense that traders have looked for more stability.

That typically means that they go and buy into US dollar denominated securities and generally that has the effect of weakening some of the smaller developed country currencies, such as Canada.

Since the vote we've seen roughly about a 2 to almost 3 cent decline in our dollar and that has actually had a really positive effect on hog prices but it's added a lot of uncertainty and we really don't know how long hog producers are going to be benefitting from this weaker dollar.

Fulton says it's just generally uncharted territory and, when uncertainty comes into play, traders generally flock to that US dollar and it currently works to the advantage of Canadian hog producers.

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