The Pound Canadian Dollar (GBP CAD) exchange rate fluctuated as markets reacted to Philip Hammond’s first and last Autumn Statement as UK Chancellor of the Exchequer.
Pound Canadian Dollar (GBP CAD) Exchange Rate Unstable Due to Autumn Statement
The Pound fell against the Canadian Dollar this morning as markets anticipated a downbeat financial outlook from the Chancellor, with markets forecasting a £100billion ‘black hole’ in public finances.
It appeared that Sterling would face additional losses as Hammond began his statement as he told the commons that the UK economy was in an even worse condition than expected as the ‘black hole’ was revealed to actually be £122billion.
However, markets reacted positively to the Chancellor’s promises to spend more on the UK’s infrastructure, vowing to spend £1billion on the UK’s digital appeal by introducing 5G mobile access and improving superfast broadband availability for businesses.
Unexpectedly the Chancellor also announced that he would be abolishing the Autumn Statement, and instead replacing it with the annual Budget statement and a brief spring statement to update on OBR forecasts.
Canadian Dollar (CAD) Struggles on Muted Rise in Oil Prices
The Canadian Dollar’s (CAD) gains against the Pound (GBP) this morning have been quickly reversed as investors reacted to muted oil prices on Wednesday.
After rising significantly earlier this week, prices of crude appear to be capped as markets once again begin to doubt that the members of OPEC will be able to agree to a large enough global production cut to make any notable dent in the global surplus.
The success of any potential agreement relies upon Iraq and Iran, who have both been reluctant to agree to any production cuts after international sanctions were finally lifted earlier this year.
Pound Canadian Dollar Forecast: Pound May Rise After Friday’s GDP Report
The Pound Canadian Dollar may be able to rally further later this week when Britain’s latest GDP data is released, with analysts currently predicting that figures will rise from 2.1% to 2.3%, helping to alleviate fears that the UK’s vote to leave the EU may have damaged the UK economy.
However a disappointing report is likely to cause the GBP CAD exchange rate to tumble as markets worry that the economy is slowing down even before it has to navigate the difficulties of ‘Brexit’.
Meanwhile a rise in US oil inventories later today could also weigh on crude prices and subsequently cause the Canadian Dollar to drop against Sterling.
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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