Oil Slump Weighs on Canadian Dollar (CAD) Exchange Rate
After yesterday’s slump in oil prices the Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate has continue to trend higher on Thursday morning in the region of 1.8643.
Higher US Crude Inventories Turn Canadian Dollar (CAD) Bearish Today
As US crude inventories were found to have risen far further than forecast the Canadian Dollar (CAD) has fallen back against rivals on Wednesday afternoon. Consequently the Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate has trended higher in the region of 1.8643.
After the latest federal budget boosted demand for the Canadian Dollar (CAD) the Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate weakened on Wednesday morning.
Hopes of OPEC Production Freeze Pushed Canadian Dollar (CAD) Exchange Rate Higher
The appeal of Pound Sterling (GBP) remained muted on Tuesday as domestic data failed to offer markets any reason for optimism. February’s Consumer Price Index was a particular disappointment, with baseline inflation holding steady at 0.3% on the year rather than rising modestly to 0.4% as investors had anticipated. With hopes for the Bank of England (BoE) to begin adopting a more hawkish outlook sooner dashed this saw the Pound promptly shedding value across the board.
Sustained resurgence in the price of oil also boosted the Canadian Dollar (CAD) at the start of the week, with Brent crude holding above $40 per barrel after comments from the OPEC secretary-general confirmed a meeting of producers scheduled for mid-April. Encouraging speculation of a potential production freeze this helped to keep the ‘Loonie’ buoyant in spite of an increasing atmosphere of risk aversion.
Brexit Fears Weigh Heavily on Pound Sterling to Canadian Dollar (GBP/CAD) Exchange Rate
London Mayor Boris Johnson has appeared in front of a parliamentary committee on Wednesday morning, helping to drive up ‘Brexit’ concerns and pushing the Pound lower against rivals. With the latest polls also suggesting that the lead of the ‘Remain’ campaign has narrowed to its lowest level yet confidence has taken another hit.
Last night’s Canadian federal budget has helped to shore up the Canadian Dollar further, in spite of an increasing sense of jitteriness on commodity markets. While Finance Minister Bill Morneau’s first budget is built on so-called deficit financing the raft of infrastructure investment and public service supportive details announced have been generally well received by markets. With the Canadian economy in a less-than-optimal state this shift towards positive investment and fiscal measures has buoyed hopes of a turnaround.
GBP/CAD Exchange Rate Forecast: UK Retail Sales to Prompt Fresh Pound Downtrend
Ahead of the Easter holiday the GBP/CAD exchange rate is expected to see movement on the back of February’s UK Retail Sales figures. As these are anticipated to show a decline in consumer spending, however, the Pound may experience fresh softening.
The Canadian Dollar, meanwhile, could retreat if markets continue to take a more bearish view. Should tomorrow’s US Durable Goods Orders prove substantially dovish, though, the ‘Loonie’ could be bolstered by any resultant drop in the US Dollar. As members of the Federal Open Market Committee (FOMC) have been taking a rather more hawkish tone in recent days any stronger US data, on the other hand, is likely to weigh heavily on market sentiment.
Current GBP, CAD Exchange Rates
At the time of writing, the Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate was trending lower at 1.8521, while the Canadian Dollar to Pound Sterling (CAD/GBP) pairing was making gains around 0.5399.