After OPEC chose not to cut the current rate of oil production, the Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate advanced by around 0.17%. This is despite the fact that British data printed disappointingly on Friday. The fall of OPEC and declination in oil prices weighs heavily on the commodity-correlated Canadian Dollar.
The pound Sterling to Canadian Dollar exchange rate is currently trending in the region of 1.7861.
Yesterday…
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate continued to advance on Friday as commodity prices dropped to a five-year low following Thursday’s OPEC meeting.
Australia and New Zealand Banking Group commented: ‘Precious metals declined as lower oil prices prompted concerns about deflation.’
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate has rocketed higher in the second half of Thursday’s European session, reclaiming lost ground from earlier in the day. The highly anticipated OPEC meeting saw members decide to refrain from cutting oil production.
The five hour meeting concluded with an agreement to continue the current rate of production, despite the recent drop in oil prices.
Energy expert Simon Wardell commented: ‘Saudi Arabia and the Gulf states can resist for a while. They have significant financial assets that mean they can sustain a lower oil price. They can secure their budgets without a higher oil price.’
The Pound to Canadian Dollar (GBP/CAD) exchange rate remained bearish when it emerged that Canada’s current account deficit narrowed in the third quarter to the lowest level since 2008.
Official figures showed the deficit shrank from -$9.9 billion to -$8.4 billion, despite economists’ forecasts to rise to -$11.0 billion. The ecostat shows that the economic growth in Canada is picking up following what some may call a cooling off period.
The positive figure was an effect of an increase in non-energy exports and a decline in investment and tourism deficits.
UK Politics Pressure Pound Sterling (GBP) Exchange Rate Lower
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate fell during Thursday’s European session as UK political uncertainty continued.
Since the Scottish referendum earlier in the year, the face of UK Politics has been changing. The Smith Commission took opinions and recommendations from the Scottish National Party, Labour, Conservatives, Liberal Democrats, and Greens to recommend that the Scottish parliament should be able to set income tax rates and bands.
As political debate continues, the Pound could remain bearish. Moreover, in the lead up the the UK general election in May 2015, the Pound Sterling exchange rate could face some severe swings against other currency majors.
Pound Sterling to Canadian Dollar (GBP/CAD) Exchange Rate Advances as OPEC Members Convene
Earlier in the session… The The Pound to Canadian Dollar exchange rate (GBP/CAD) exchange rate has made modest advances before the Organisation of the Petroleum Exporting Countries (OPEC) meeting takes place in Vienna, Austria.
The meeting scheduled for today (Thursday 27th November) was ordered to discuss the possibility of a cut in oil production as a surplus is driving prices lower the world over. However, it appears as if the meeting may take some time to resolve as a pre-OPEC summit saw Russia, Mexico, Saudi Arabia and Venezuela suggest that they weren’t willing to cut their production levels to encourage oil prices higher.
Saudi Arabia Oil Price Cut Pressured Canadian Dollar (CAD) Exchange Rate Lower
Saudi Arabia caused a stir when it first decided to cut its oil prices several weeks ago—a development that saw the ‘Loonie’ commodity currency depreciate. In addition, United Arab Emirates Oil Minister Suhail bin Mohammed al-Mazroui suggested that oil production cuts shouldn’t be taking place because ‘the market will fix itself ultimately.’
However, there seems to be a large amount of speculation and debate surrounding the OPEC meeting with different views surfacing. Iranian Oil Minister Bijan Zangeneh commented: ‘The most important thing for all of us is the unity and solidarity of OPEC, and in this situation I believe we need to have the contribution of non-OPEC producers for managing the market.’
Zangeneh continued: ‘Some OPEC members believe that this is the time where we need to defend market share… All the experts in the market believe we have oversupply in the market and next year we will have more oversupply.’
Oil prices have dropped since June by over 30% after US shale oil output increased and the global economic growth was hindered by factors such as the floundering Eurozone recovery.
Pound to Canadian Dollar (GBP/CAD) Exchange Rate Forecast
Meanwhile, the Lloyds Business Barometer came in better than forecast in November at 42 index points from October’s 35. Friday will see UK GFK Consumer Confidence Survey figures released which could offer the Pound some support if favourable.
Friday will be a massively influential day for the Canadian Dollar, not only may some news of the OPEC meeting emerge, but also Canadian Gross Domestic Product (GDP) figures will be published. The ‘Loonie’ needs some upbeat ecostats to help it reclaim some losses from falling oil prices.
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 , 1.7762,
US Dollar,,Canadian Dollar , 1.1272,
Euro,,Canadian Dollar , 1.4058,
Australian Dollar,,Canadian Dollar , 0.9666,
New Zealand Dollar,,Canadian Dollar , 0.8881,
[/table]
