The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate continued to firm on Wednesday as economists forecast that upcoming UK employment data will show signs of improvement.
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate regained ground on Tuesday as oil prices resumed their steady decline. Global risk aversion also pushed the ‘Loonie’ lower.
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate softened as Monday’s session progressed as oil prices found support from fighting in Libya and an oil workers strike in Nigeria. The two events softened oil supplies which in turn sent prices of the commodity higher.
Earlier the Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate is forecast to advance to its highest level since early November as concerns over commodity prices and a slowing global economy continued to weigh on commodity based assets.
Overnight the ‘Loonie’ did manage to regain some ground as oil prices briefly ticked higher. The rise was very short-lived however as the United Arab Emirates suggested that that the Organisation of Petroleum Exporting Countries (OPEC) will likely refrain from cutting oil production even if prices fall to $40 a barrel.
Oil Inched Higher on Libya Fighting
Oil prices inched higher away from its lowest level in five years after Libya said that it unable to unload cargoes at two of the nation’s major ports as fighting between militant groups continues to rage. Fighters from Fajr Libya, an anti-government coalition, attacked al-Hilal from three sides on Saturday but the air force repelled them, Brigadier-General Saqr Jarushi said. He added that air force jets and attack helicopters struck the rebel fighters as the advanced on the oil terminal.
‘Libya may have helped the market stay above $60. A small recovery from time to time is inevitable. Maybe some optimists think that $50 marks the bottom of the market, but I can see nothing to support that theory,’ said Christopher Bellew, senior broker at Jefferies International Ltd.
The Canadian Dollar then came back under pressure after the energy minister from the United Arab Emirates suggested that OPEC would refrain from cutting oil production from 30 million barrels a day despite tumbling prices.
‘We are not going to change our minds because the prices went to $60 or to $40. We are not targeting a price; the market will stabilise itself. We need to wait for at least a quarter to consider an urgent session,’ said Suhail Al-Mazrouei.
With oil prices set to remain under pressure, we can expect the GBP/CAD exchange rate to continue to strengthen. Against the US Dollar, the ‘Loonie’ slumped to a fresh 54-month low.