GBP/CAD Exchange Rate Edges Higher as Oil Prices Continue to Rise
The Pound to Canadian Dollar (GBP/CAD) exchange rate rose by 0.6% today, with the pairing currently trading around CA$1.737.
The Canadian Dollar (CAD) struggled against a stronger Pound (GBP) today despite the commodity linked ‘Loonie’ benefiting from higher oil prices.
Ronald Simpson, the managing director at Action Economics, said that CAD had risen ‘as oil prices rallied following reports OPEC may be near a deal to extend production caps through Q1 (the first quarter) of 2021.’
Tsvetana Paraskova, an analyst at OilPrice.com, was also optimistic about rising oil prices owing to the rollouts of Covid-19 vaccines throughout Europe and America, saying:
‘On the demand side, vaccines could boost oil demand in the latter half of 2021, but a weaker rebound in demand early next year because of the second COVID wave could slow down the drawing down of oil and product inventories which, at least in the United States, are still above the most recent five-year averages.’
However, the CAD/GBP exchange rate remained subdued today, with Sterling rising on growing optimism over a possible UK-EU Brexit trade agreement in the coming days.
Pound (GBP) Rises as Positive Covid-19 Infections Drop in UK
The Pound (GBP) rose today after the NHS Track-and-Trace app revealed that positive Covid-19 infections throughout England had dropped sharply.
Consequently, demand for Sterling has rising as hopes grow over the number of Covid-19 cases could be easing off before the end of the year.
The Department of Health and Social Care revealed that 110,620 people had tested positive for the coronavirus in the week ending November 25, that’s a -28% decrease compared to the previous week.
In UK economic news, today saw the release of the latest UK Services PMI for November, which beat forecast and rose from 45.8 to 47.6.
Nevertheless, with the UK’s largest sector still in contraction territory, this failed to buoy confidence in the British economy.
Duncan Brock, the Group Director at the Chartered Institute of Procurement and Supply, commented on the data:
‘After four months of welcome recovery, November’s figures revealed an inevitable downturn in the services sector, as further lockdown restrictions impacted customer-facing businesses and any new work was rapidly extinguished. Though the rate of depletion of new orders had softened from the previous month, this reduction was at least in part due to the reduced capacity for new work in firms still operating in a shrinking marketplace.’
GBP/CAD Outlook: Could Brexit Optimism Boost the Pound?
Canadian Dollar (CAD) investors are looking ahead to tomorrow’s release of November’s Canadian unemployment Rate data.
Any signs of Canadian joblessness easing off last month would prove CAD-positive.
Tomorrow will also see the release of the Canadian Average Wages data for November.
Again, any improvement in the outlook for Canada’s economy would boost the ‘Loonie’.
The GBP/CAD exchange rate will continue to be driven by Brexit developments this week.
Any further signs that a Brexit deal could be on the horizon would be GBP-positive.
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