The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate recorded gains on Wednesday in the day before the Organisation of the Petroleum Exporting Countries (OPEC) meeting.
However, not everyone has been concerned about the recent dip in oil value due to a global surplus. Wednesday saw countries such as Venezuela, Mexico, Russia and Saudi Arabia state that they would be unwilling to cut production. However, the four countries did state that they would be monitoring oil prices on a quarterly basis.
UAE oil minister Suhail bin Mohammed al-Mazroui commented: ‘We are not going to panic this is not the first time, this is not a crisis that requires us to panic… we have seen (prices) way lower. We are not interested in the short fixes because we know they will not last.’
UK GDP Figures Offer Pound Sterling Exchange Rate Support
Earlier in the session… The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate extended its gains in Wednesday’s European session after UK Gross Domestic Product (GDP) figures remained in line with economists’ forecasts. Growth in the third quarter reached 0.7% leaving the annual figure to reside at 3.0%.
However, CBI Reported Sales saw a dip in November at only 27 index points from 31. Economists’ had forecast a 28 figure.
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate clawed back some of Tuesday’s losses in the early part of Wednesday’s European session, as Saudi Arabia’s oil minister Ali Al-Naimi stated that he was against cutting oil production.
Al-Naimi commented: ‘No one should cut and market will stabilise itself. Why Saudi Arabia should cut? The US is a big producer too now. Should they cut?’
With the upcoming OPEC meeting being subject to so much debate, it is likely that the Canadian Dollar will experience massive fluctuations in the run-up.
Canadian Retail Sales offer Canadian Dollar Exchange Rate (CAD) Support
In Tuesday’s session… The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate extended its losses during the second half of the European session when it emerged that Canadian Retail Sales rebounded quite spectacularly.
The rise in sales marks the first in the latter three months led by big-ticket items such as cars furniture and appliances. Statistics Canada recorded 0.8% growth in September after August’s -0.2% contraction and the forecast 0.5%. The Canadian commodity currency has the opportunity to recoup some losses from falling oil prices on the news.
Dovish Bank of England (BoE) Governor causes Pound Sterling Losses
Earlier in the session… The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate tumbled as Bank of England (BoE) Governor Mark Carney spoke in parliament.
The central banker has been grilled over all aspects of the UK economy and reiterated that increases in UK interest rates are likely to be slow and gradual. Strategist Nick Stamenkovic stated: ‘The message from the BoE is that they are in no rush to raise interest rates.’
UK House Loans Drop to Weakest Level since May 2013
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate was trending higher in the early part of Tuesday’s European session as oil prices and upcoming Gross Domestic Product (GDP) data softened the ‘Loonie’. However, the Pound may not be able to hold on to gains as UK BBA Loans for House Purchase fell to its weakest level since May 2013.
Loans for House Purchase dipped to 37,076 in October after September’s 39,271, despite economists’ forecasting a softer 38,500 in October. June was a turning point for house loans which saw the figure consecutively trend lower in the months that followed. Moreover, on a monthly basis UK house loans are over 10,000 down per month since the beginning of the year.
Bank of England (BoE) Speech could Influence Pound Sterling Exchange Rate
The Pound Sterling to Canadian Dollar exchange rate may soften significantly in response to the data or may remain relatively stable until Bank of England (BoE) Governor Mark Carney speaks in London later in Tuesday’s session.
However, Wednesday won’t let up on pressure for the Pound when UK Gross Domestic Product (GDP) figures are out. Economists’ have forecast the annual figure to remain at 3.0% in the third quarter with a quarterly growth of 0.7%. In addition, CBI Reported Sales figures will also be out which could offer further fluctuations for the Pound. The UK sales index is expected to dip from October’s 31 to 28 in November.
The Canadian Dollar exchange rate could feel the impact of Canadian Retail Sales figures out during Tuesday’s session which could offer the falling ‘Loonie’ some support. Forecasts have predicted a 0.5% growth in the month of September after the previous -0.3% contraction.
Softer ‘Loonie’ Exchange Rate after Oil Prices Drop
The Canadian Dollar has fallen as a result of lower oil prices in recent months. The Organization of Petroleum Exporting Countries (OPEC) is scheduled to meet in Vienna on 27th November to discuss the fall in oil prices and the amount of production undertaken.
Barclays commented: ‘The reduced leverage that OPEC now has over the oil market is likely to make it more cautious about cutting production. The rapid growth being achieved in non-OPEC production means it faces the risk that even a large cut to supply may not be enough to support prices and could simply result in lost market share and revenue.’
Pound to Canadian Dollar (GBP/CAD) Exchange Rate Forecast
In the rest of the day, the Pound to Canadian Dollar (GBP/CAD) exchange rate is likely to fluctuate after Bank of England (BoE) Governor Mark Carney speaks in London. The central banker could discuss interest rates which would be likely to see major Pound movement. The Canadian Dollar awaits Retail Sales numbers later in the day.
The GBP/CAD exchange rate is presently trending in the region of 1.7737.
Canadian Dollar (CAD) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Pound Sterling,
,Canadian Dollar , 1.7721,
US Dollar,,Canadian Dollar , 1.1284,
Euro,,Canadian Dollar , 1.4057,
Australian Dollar,,Canadian Dollar , 0.9578,
New Zealand Dollar,,Canadian Dollar , 0.8809,
[/table]
