Pound Sterling Canadian Dollar (GBP/CAD) Exchange Rate Muted as Oil Prices Rise
The Pound Sterling Canadian Dollar (GBP/CAD) exchange rate remained flat, leaving the pairing trading at around CA$ 1.7207.
The oil-sensitive ‘Loonie’ edged higher today after oil prices rose on Friday.
Prices were offered support after Russia announced it would support OPEC’s recommendation to cut output as demand weakens thanks to the spread of the Wuhan coronavirus.
Lingering fears over the virus caused Brent crude to head towards its fifth weekly loss.
Commenting on OPEC, National Australia Bank’s head of commodities research, Lachlan Shaw said:
‘The OPEC+ cuts are supportive of prices near term, but we are still facing uncertainty about the timing and speed of Chinese activity restarting post Chinese New Year.’
Prices were hit earlier after China’s central bank governor stated the economy may slow in the first quarter.
Added to this, the number of confirmed coronavirus cases in Japan jumped after a cruise liner off its coast reported at least 61 cases.
Sterling (GBP) Headed for its Worst Week Since General Election
The Pound remained muted against the ‘Loonie’ as investors continued to fret about the UK’s future relationship with the European Union.
At the start of the week, Prime Minister Boris took a tough stance with the EU ahead of trade negotiations.
This caused Sterling to head towards its worst week since the UK election as Johnson stated the UK would not follow the bloc’s regulations.
Some analysts have noted this gives Britain a weaker position against the country’s largest export market.
Talks will need to conclude before the end of the transitionary period at the end of 2020 to avoid a disruptive break.
Commenting on this, head of investment research for BDSwiss Group, Marshall Gittler said:
‘I expect that the post-Brexit trade negotiations will continue to weigh on Britain, a country with one of the largest current account deficits in the world.’
However, any gains Sterling is able to make against the Canadian Dollar next week could be limited.
Explaining this, ING analysts wrote:
‘While GBP benefited from the risk rally in the middle of the week, its gains vs EUR and USD have been limited as the overhang of upcoming UK-EU negotiations limits GBP upside potential.
‘We continue to expect the periods of GBP rebounds to be shallow and short-lived.’
Pound Canadian Dollar Outlook: CAD to Rise as Canadian Data in Focus
Looking ahead to this afternoon, the Canadian Dollar (CAD) could edge higher against the Pound (GBP) following Canadian employment data.
If the number of people in work increases more than expected in January, the ‘Loonie’ will rise.
CAD could make further gains following the release of the Ivey PMI later today.
If January’s PMI jumps higher than expected, the Pound Canadian Dollar (GBP/CAD) exchange rate will slump.
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TAGS: Pound Canadian Dollar Forecasts