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GBP/CAD Exchange Rate Regains Traction as Oil Prices Soar

Pound Canadian Dollar exchange rate forecast

The GBP/CAD exchange rate is gaining traction today though is still hovering around a 3 month low as oil prices soar, supporting the Canadian Dollar.

At the time of writing the Pound Canadian Dollar pairing are currently trading at around CA$1.7251, as Pound investors await the outcome of the latest EU summit.

Pound (GBP) Investors Await Outcome of EU Vaccine Summit

The Pound has steadily gained traction against the Canadian Dollar during today’s session as investors readily await the outcome of the EU vaccine summit.

EU members are meeting this afternoon to discuss the vaccine rollout across the bloc.

It’s expected that members will discuss whether the EU should ban exports of the AstraZeneca vaccine.

If the decision is made to ban exports, the UK’s roadmap out lockdown could be delayed and the Pound could suffer.

Michael Hewson, chief market analyst at CMC Markets UK, commented on the tensions between the UK and EU:

‘Tensions between the EU and UK still remain fairly elevated, despite efforts to cool the narrative, while the recent comments from Thierry Breton, the EU’s internal market commissioner, accusing the UK of vaccine nationalism still suggest the potential for a misstep, as feelings continue to run high, particularly on the EU side, where the sense of grievance remains especially elevated.’

Sterling has been supported by the continuing success of the UK’s vaccine rollout with over 30 million adults across the UK receiving a dose of the vaccine.

Canadian Dollar (CAD) Rates Benefit from Surge in Oil Prices

The Canadian Dollar has been appealing to investors today despite a risk-aversion mood as the blockage of the Suez canal is pushing oil prices higher.

Peter Berdowski, CEO of Dutch company Boskalis, commented on the task ahead of removing the ship:

‘We can’t exclude it might take weeks, depending on the situation. It is like an enormous beached whale. It’s an enormous weight on the sand.’

‘We might have to work with a combination of reducing the weight by removing containers, oil and water from the ship, tug boats and dredging of sand.’

Ronald Simpson, Managing Director of Global Currency Analysis at Action Economics also commented on the impact the ship has had on exchange rates:

‘Until the container ship that ran aground in the Suez Canal can be cleared, Mid-East oil exports will slow significantly, which will keep oil prices firm for the time being, and continue to weigh on USD-CAD.’

GBP/CAD Currency Forecast: UK Retail Sales in Focus Heading into the Weekend

Tomorrow sees the release of UK retail sales for February which are expected to show a 2.5% growth in the sector.

If the data meets forecasts, it would push the Pound higher heading into the weekend.

In absence of any notable data, the Canadian Dollar will continue to be driven by any shifts in global market sentiment and rising oil prices.

The GBP/CAD exchange rate will further be driven by any coronavirus developments.

If the EU does chose to ban exports of the coronavirus vaccine to the UK, Sterling would suffer.