The Pound has been in low demand once again today, owing to renewed concerns that ‘Brexit’ negotiations are going nowhere fast.
The Canadian Dollar has been a mixed option, on account of the latest commodity price shifts for gold and crude oil moving in opposite directions.
Pound Softened after Rumours of Hammond Exit, Canadian Dollar Unsettled on Commodity Shifts
As with the previous week, the Pound has traded poorly against the Canadian Dollar so far, having dropped by -0.3% to 1.59.
The latest damage done to Sterling has come from the Government, where rumours have been circulating that Chancellor Phillip Hammond has been criticised for taking a soft stance on immigration in the context of ‘Brexit’ talks.
The Canadian Dollar has made gains against the Pound but elsewhere fallen against the Euro and New Zealand Dollar, on account of the latest shifts in nationally important commodity prices.
While the cost of crude oil remains in the area of $50 per barrel after OPEC-induced rises, the cost of gold per 100 ounces has conversely bottomed out in the area of $1258 recently.
Pound Sterling Unlikely to Recover if Widespread ‘Brexit’ Fears Persist
Looking ahead, the Pound seems set to remain in the economic doldrums against the Canadian Dollar, as long as the currently prevalent ‘Brexit’ negotiation concerns persist.
In particular, the fear among investors that the ‘left hand doesn’t know what the right is doing’ has been exacerbated by rumours of division among senior Government figures.
It remains something of an unknown quantity as to just what will satisfy investors and economists that all is well among the ‘Brexiteers’. One event to watch out for is the triggering of Article 50 in Q1 next year; after this, the Pound seems set to grow even more volatile on the fears that the UK will be left with a ‘bad deal’ due to Government infighting and EU indifference.
Canadian Dollar Forecast: Eyes on OPEC, Russia for Future ‘Loonie’ Movement
When it comes to likely sources of future Canadian Dollar movement, oil production is set to be one of the greatest in the weeks and months to come.
This is due to the longstanding problem faced by the oil-producing industry, which is balancing production with limitations in order to keep supplying the world’s needs while also keeping the price of the commodity high.
Recently, OPEC members have provisionally moved towards freezing production, while Russian President Vladimir Putin has also voiced support for his nation limiting production.
Bloomberg First Word Oil Strategist Julian Lee recently offered a pessimistic take on the situation, stating;
‘OPEC will be lucky if Russia’s contribution goes much beyond warm words of support. And support is very different from participation’.
What this could mean for the Canadian Dollar is that while oil prices may continue to rise in the near-term, boosting the currency’s value, the odds of long-term support coming from this area remain low overall.
Recent Interbank Exchange Rates
At the time of writing, the Pound Canadian Dollar (GBP CAD) exchange rate was trending in the region of 1.59 and the Canadian Dollar Pound (CAD GBP) exchange rate was trending in the region of 0.62.
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