Cambridge Mercantile Group

Cambridge Mercantile Group

July 10, 2014 09:00 ET

Cambridge Mercantile Group Releases Mid-2014 FX Risk Forecast with Focus on North America & Eurozone

Company's Risk Management Specialists Eye Storm Brewing in Wake of Diverging Central Bank Policies

TORONTO, ONTARIO--(Marketwired - July 10, 2014) -

Editor's Note: There is a video associated with this press release.


  • Period of Loonie weakness to extend in face of economic risks and US yield increases
  • ECB accommodative monetary stance may be precursor to EUR volatility

Cambridge Mercantile Group, a corporate global payment and risk management solution provider, is expecting a steady performance for the USD/CAD, and a rocky period for the EUR, for the latter half of 2014. The company's market analysts, whose insights are regularly sought by media and major surveys, are keeping a close watch on market risks arising as central banks diverge across the globe.

Despite a rise in the Consumer Price Index (CPI) over the past several months, the firm has cut its year-end forecast for the Loonie from its previous report, citing more progress needed with respect to export growth and commercial investment. In addition, the Bank of Canada remains weary of the downside risks to low inflation, maintaining a neutral stance on interest rates over the next year. The bank also sounded a warning on a potential banking system crisis in China, which could stall the country's demand for exports and prove detrimental to Canada's commodities sector. US steps towards more normative borrowing rates have also put pressure on the CAD.

However, similar to most other regions of the world, economic growth has been on the downtrend over the past few quarters for the US.

"Largely attributed to severe weather conditions earlier this year, the recovery has recently failed to meet levels anticipated by the Federal Reserve," said Scott Smith, Senior Market Analyst, Cambridge Mercantile Group. "While trade figures will likely weigh on GDP growth over the second quarter, a shift from the heavy reliance based on consumer-led demand to a strong focus on business investment, should help the American economy see a robust rebound in the coming months."

One region where climbing oil and gas prices pose a substantial threat is Europe. While the economic bloc seeks alternative sources outside of Russia and the Middle East, the Eurozone remains highly vulnerable to supply disruptions.

"Much as we had expected, the European Central Bank has begun injecting precisely targeted stimulus in an effort to add liquidity and kick up inflation," said Karl Schamotta, Director, FX Research and Strategy, Cambridge Mercantile Group. "But conflict in the Middle East represents a tail risk. In the event that oil prices spike higher, policymakers could find themselves caught between rising inflation pressures and slowing growth expectations. If so, the ECB may be forced to step on the brakes, and markets could receive a nasty shock, spelling an end to the current period of complacency."

Cambridge Mercantile Group's market analysts are currently offering their analyses and recommendations to businesses, both large and small, on hedging against EUR movements over the next several months to protect earnings and gain potential returns.

About Cambridge Mercantile Group

Since its inception in 1992, Cambridge Mercantile Group has grown to become a leading provider of global payments and currency risk management solutions. With more than 14,000 clients worldwide, Cambridge is among the largest bank-independent providers of hedging and risk management products, powered by technologies widely regarded as industry leading. Cambridge delivers a superior level of service to clients through extensive knowledge of foreign exchange and award-winning operational capabilities, supported by an experienced trading, account management and consultative sales team. With offices strategically located across the globe, including North America, Europe and Australia, Cambridge facilitates the secure movement of over $23 billion annually. For more information, visit

Forward Looking Statements

This news release may contain forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 and Canadian securities law. The terms and phrases, "believe", "could", "expect", "forecast",
"may", "indicate", "look forward", "outlook", "pose", "represents", "should", "to", "would", "will", and similar terms and phrases are intended to identify these forward-looking statements. Forward-looking statements are based on estimates and assumptions made by Cambridge Mercantile Group in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors that Cambridge Mercantile Group believes are appropriate in the circumstances, including but not limited to general economic and financial market conditions and currency performance. There are several factors that could cause Cambridge Mercantile Group's actual currency rate/price predictions to differ materially from those expressed or implied by the forward-looking statements, including, without limitation: risks related to economic and political events; Cambridge Mercantile Group's reliance on the expertise of its personnel; and difficulties in forecasting changes in the financial market particularly over longer periods given the potential for rapid changes in market sentiment. These factors should be considered carefully, and readers should not place undue reliance on Cambridge Mercantile Group's forward-looking statements. Cambridge Mercantile Group has no intention and undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

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