GBP/CAD Exchange Rate Flat as Canadian Dollar Steadies on Crude Oil Uptick
The Pound Canadian Dollar (GBP/CAD) exchange rate steadied today, leaving the pairing trading around CA$1.6377.
The Canadian Dollar (CAD) remained steady against the Pound (GBP) has continued to hold onto yesterday’s gains as the oil-sensitive ‘Loonie’ benefited in an uptick in crude oil prices.
Harry Tchilinguirian, a Global Oil Strategist at BNP, was dovish however, saying:
‘Despite the bullish supply-side fundamentals and geopolitics that support oil prices, it seems that the market needs a positive economic catalyst to move appreciably higher.’
However, following yesterday’s announcement from the European Central Bank (ECB) which indicated a likely rate cut in September, along with the US Federal Reserve also expected to slash its rate later this month, we could see oil prices begin to edge higher.
Terry Sandven, a Chief Equity Strategist at US Bank Wealth Management, commented:
‘We see evidence that the global economy is in a slow-growth mode with weakness in Europe, Japan and emerging markets. That provides support for central banks around the world to continue with a dovish easing policy.’
As the Canadian economy is reliant on global trade, however, heightening global uncertainty could begin to weigh on the CAD/GBP exchange rate.
GBP/CAD Exchange Rate Rangebound as Brussels Rejects Boris Johnson’s Brexit Deal
The Pound (GBP) meanwhile has failed to rise against many of its competitors this morning, following Brussels’ criticism of Prime Minister Boris Johnson’s quest for a new Brexit deal.
The President of the European Commission, Jean-Claude Juncker, has signalled that the EU would stick to the original deal negotiated with previous Prime Minister Theresa May.
A spokesperson for the commission said:
‘President Juncker listened to what Prime Minister Johnson had to say, reiterating the EU’s position that the withdrawal agreement is the best and only agreement possible – in line with the European council guidelines.’
As a result, UK markets have become increasingly jittery over the increased likelihood of a no-deal Brexit in October.
GBP/CAD Outlook: Could Sterling Sink on Increasing Political Uncertainty Next Week?
Sterling traders will be looking ahead to Monday’s release of the UK Net Consumer Credit figures for June.
Any signs of an improvement could prove Pound-positive.
Canadian Dollar (CAD) traders, meanwhile, will be looking ahead to next week’s Canadian growth figures which are due for release on Wednesday.
However, as Parliament goes on its summer recess next week, Brexit concerns are likely to rise as tensions between the UK and the EU are likely to increase, leaving Sterling traders jittery on heightened political uncertainty.