GBP/CAD Exchange Rate Falls as Covid-19 Tier System Reintroduced for December
The Pound to Canadian Dollar (GBP/CAD) exchange rate dipped by -0.2% today, with the pairing currently trading around CA$1.73.
Sterling rose today following the announcement of the full list of areas throughout England that would be re-entering the tier system after the lockdown eases on December 2nd.
UK Health Secretary Matthew Hancock said that tier decisions would be reviewed weekly from mid-December.
Despite the UK being expected to face further economic uncertainties next month – and in 2021 – investors heaved a sigh of relief at the easing of the nationwide lockdown.
However, Brexit uncertainty continues to drag down the GBP/CAD exchange rate, with SMMT warning that car production in the UK could fall significantly in the event of a no-deal.
Mike Hawes, the Chief Executive at SMMT, commented:
‘Above all, we must have a Brexit deal, one with zero tariffs, zero quotas and rules of origin that benefit existing products and the next generation of zero emission cars, as well as a phase in period that allows this transition to be ‘made in Britain’.’
Meanwhile, the European Commission’s (EC) Ursula von der Leyen said that the European Union (EU) was willing to be ‘creative’ in securing a UK-EU Brexit deal.
Nevertheless, with still no signs of Downing Street being willing to concede on a trade agreement, GBP investors are remaining cautious.
Canadian Dollar (CAD) Edges Higher as Oil Prices Rise
The Canadian Dollar (CAD) has continued to edge higher today, with the commodity-linked currency benefiting from rising oil prices.
Yesterday saw the WTI Crude top $45, buoying demand for the ‘Loonie’.
Tamas Varga, an analyst at PVM, commented:
‘The fight against the coronavirus is intensifying and is proving to be increasingly successful by the week.’
David Sheppard, the Energy Editor at the Financial Times, said:
‘Oil prices have also been buoyed by expectations that Opec and allies including Russia will extend the duration of their production cuts when they meet next week, to offset weak demand over the winter months.’
As a result, we could see the Canadian Dollar head higher this week as Covid-19 vaccine hopes contribute to the upsurge in oil prices.
GBP/CAD Outlook: Rising Oil Prices to Uplift ‘Loonie’
The Pound (GBP) will continue to be driven by Brexit speculation this week.
As a result, we could see GBP fall if it looks increasingly likely that Downing Street will maintain its hard-line position on Brexit by refusing to concede on a post-Brexit trade agreement.
Meanwhile, the Canadian Dollar (CAD) will continue to remain sensitive to oil price fluctuations.
The GBP/CAD exchange rate would continue to fall if the commodity-linked ‘Loonie’ benefits from rising oil prices.