Pound (GBP) Exchange Rate Gains on ‘Brexit’ Debate
After dropping around two cents yesterday evening the Pound Canadian Dollar (GBP CAD) exchange rate mounted a recovery this morning following the news that Prime Minister Theresa May would allow UK MPs to hold a parliamentary debate on any potential ‘Brexit’ strategy.
Many opposition MPs have become increasingly vocal in recent weeks as it look inevitable that the government would pursue a ‘hard Brexit’ in the split from the EU. This would grant greater controls over immigration and would require the UK to relinquish access to the single market, a prospect that has caused the Pound to tumble in recent months as investors fear the uncertainty that surrounds it.
While this news is certainly positive for Sterling, the fact that there will be no actual vote on the terms will likely cause market sentiment to drop again in the immediate future.
Canadian Dollar (CAD) May Fall as Future of OPEC Deal Looks Uncertain
The Pound may continue to pressure the Canadian Dollar as the potential of an OPEC deal to raise oil prices by curbing global production may be at risk, despite Russian President Vladimir Putin agreeing to join. This is because Igor Sechin, the head of state-controlled energy giant Rosneft has said his company will not cap oil production, simply responding ‘Why should we do it?’
This follows the news that any potential OPEC deal may not actually have any major effect on supplies until well into 2017 because the next meeting to set supply policy will be too late to make changes to cargo loading dates before January which will allow quite a lot of oil into the market. Further denting the oil based ‘Loonie’.
GBP CAD Forecast: Pound to Stabilise at Current Rate?
The Pound to Canadian Dollar exchange rate has traded flatly for the most of the day and could continue to do so in the short term as negative ‘Brexit’ market sentiment is balanced against the overselling of the Pound in recent weeks.
Current Interbank Exchange Rate
At the time of writing the GBP/CAD exchange rate was trending around 1.62 and the CAD/GBP exchange rate was trending around 0.61.
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