- Pound Canadian Dollar Hits 1.6230 – Canadian Dollar Pound Slides to 0.6157
- UK Releases Brexit Papers – Pound Sterling Bolstered
- Crude Oil Prices Fall on Profit Taking – Oil Down from Recent Highs
The Pound to Canadian Dollar exchange rate was bolstered this morning by the news that the UK would be releasing a run of documents relating to Brexit negotiation policy.
Two of five planned papers were released today. The first, a position paper, asserts that all goods already on the market should be allowed to remain for sale in the EU and the UK without additional tariff or restriction.
It also calls for consumer protections as a whole to remain.
The second paper calls for a reciprocal arrangement ensuring that all confidential documents that have been shared between the nations remain confidential.
These two releases were, perhaps, less significant than markets expected, as their release prompted Sterling to stall. However, more papers are due to be released as the week progresses, notably one regarding the European Court of Justice and the role it would play post-Brexit.
Brexit Secretary David Davis also asserted that the release of said publications will ‘drive the talks forward,’ promising ‘imaginative and creative solutions’ to the problems that have, thus far, stagnated proceedings.
There remains some contention, however, regarding what the ‘correct’ path is, with members of the EU Commission insisting that trade talks will not take place until the terms of Britain’s departure (divorce bill, EU citizen movement rights) have been decided.
This is directly in contrast to Davis’ intention that trade talks take place alongside withdrawal negotiations.
Profit-Taking Topples Oil Prices, CAD Bearish Before Inventory Data
Last week’s crude oil rally was rounded off this morning as traders closed positions ahead of this week’s oil inventory data.
Senior Energy Economist, Hans van Cleef, stated on the subject:
‘We are currently seeing some profit-taking after Friday’s strong rally ahead of this week’s inventory data […] Fresh uncertainty about inventories and OPEC compliance (with agreed production cuts) could be enough reason to sell some of the long positions.’
The Canadian Dollar began this week trading somewhat bearishly as a result.
Markets will be awaiting Wednesday’s US crude oil inventory figures to gain insight into the Canadian Dollar’s possible trajectory, as any indicator that the surplus has significantly diminished will drive the currency higher.
GBP CAD Forecast: Canadian Retail Sales and UK GDP on the Horizon
The main release this week for the Canadian Dollar will be Tuesday’s domestic retail sales data, with the year-on-year figure for June forecast to drop slightly from 7.3% to 6.90% and the month-on-month figure expected to drop from 0.6% to 0.3%.
For Sterling, the most significant release will be Thursday’s 2nd estimate GDP figures, with the year-on-year Q2 estimate currently being 1.7%, down from the previous period’s 2%.
Markets will, undoubtedly, also be studying the Brexit papers that are released this week.
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