The Pound Canadian Dollar (GBP CAD) exchange rate fell by around two cents yesterday as the media reported on a leaked memo from Whitehall that suggested the UK government still has no clear plans on ‘Brexit’.
Pound Canadian Dollar (GBP CAD) Tumbles as ‘Brexit’ Memo Renews Market Fears
Market sentiment towards the Pound markedly dropped following the leak as it caused further investor uncertainty in ‘Brexit’.
Despite Prime Minister Theresa May refusing to recognise the document and denying that there was no government strategy on ‘Brexit’, Sterling still fell against the Canadian Dollar as markets digested the news that Whitehall has 500 ‘Brexit’ related projects and may need 30,000 extra staff.
The memo also indicated that there was a spilt in the cabinet between pro-leave MPs, like International Trade Secretary Liam Fox who favours a hard ‘Brexit’, and those who seek to retain access to the single market like Chancellor Philip Hammond, adding to the uncertainty of how the government plans to split from the EU.
Canadian Dollar (CAD) Unstable as Oil Prices see Increased Volatility
The Pound Canadian Dollar exchange rate was able to stabilise overnight as the oil based ‘Loonie’ struggled to advance in the face of volatile crude prices.
CAD was buoyed on Tuesday as increased optimism towards the possibly of OPEC reaching an agreement to curb global oil production caused crude prices to rise by 5.7%. However an unexpected rise in US crude stocks caused prices to slide again, weighing on the Canadian Dollar and preventing any further drops in the GBP CAD exchange rate.
GBP CAD Forecast: Predicted Rise in Canadian Inflation may Pressure Pound
The Pound to Canadian Dollar exchange rate is likely to fall later this week following the release of the Canadian consumer price index, which is currently forecast to rise from 1.3% to 1.5% in October, although should inflation not rise as predicted then Sterling may be able to claw back some of its recent losses.
Long-term the ‘Loonie’ is likely to see further volatility ahead of the OPEC’s next meeting at the end of November, as markets continue speculating on whether a deal will be struck to cut global oil production. In the highly possible event that OPEC once again fails to reach a deal, it is highly likely that the Canadian Dollar will plummet in parallel with oil prices.
Current Interbank Exchange Rates
At the time of writing the GBP/CAD exchange rate was trending around 1.67 and the CAD/GBP exchange rate was trending around 0.59.
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