The Pound Canadian Dollar (GBP CAD) exchange rate hit a new weekly high this morning, but will rising oil prices reverse this trend?
GBP CAD began to give up ground earlier today, slipping by around half a cent this morning as oil prices spiked overnight.
The jump in the value of crude was largely prompted by a lacklustre rise in US stockpiles on Thursday.
Prices settled at $54.45 a barrel after rising 1.6% on Friday as US crude inventories only rose by 564k. This was below expectations of rise of 3385k and significantly down from the previous jump of 9527k.
The fall was welcomed by the Organization of the Petroleum Exporting Countries (OPEC) as attempts by its members (and other producers like Russia) have not had the desired impact on prices. This is despite crude output being cut by 1.8 million barrels a day in order to limit oversupply.
However the Canadian Dollar met some resistance this morning as the Pound was propped up by better than expected mortgage figures.
The British Bankers Association (BBA) reported that UK Mortgage Approvals rose from 43.6k to 44.7k in January, reaching a twelve-month high and impressing investors who had expected home loans to drop to 41.9k.
Analysts attributed the rise to the Bank of England’s (BoE) ultra-loose monetary policy as buyers sought to take advantage of record low interest rates, although with Brexit looming there are predictions that this will not last much longer.
Samuel Tombs, chief UK economist at Pantheon Macroeconomics said;
‘The recovery in mortgage lending, however, likely will run out of steam soon. Indicators show that households’ appetite for making big financial commitments is fading.’
The Canadian Dollar is likely to attempted another push later this afternoon however, with economists predicting that the domestic inflation rate will rise from 1.5% to 1.6% in January.
Looking further ahead Sterling may struggle over the coming month as markets brace for Brexit, with Prime Minister Theresa May planning to trigger Article 50 by the end of March, beginning two years of negotiations as the UK officially starts the process to leave the EU.
Current Interbank Exchange Rates
At the time of writing the GBP CAD exchange rate was trending around 1.64 and the CAD GBP exchange rate was trending around 0.60.
Comments are closed.