Pound Sterling Canadian Dollar (GBP/CAD) Exchange Rate Jumps as US Reluctant to Join OPEC Meeting
The Pound Sterling Canadian Dollar (GBP/CAD) exchange rate rallied by around 0.6% on Thursday. This left the pairing trading at around CA$1.7449.
The oil-sensitive Canadian Dollar slumped against the Pound today ahead of a meeting between OPEC and its allies.
OPEC and Russia are set to debate record cuts to oil production amid the coronavirus epidemic.
However, talks have been complicated by the reluctance of the United States to join and internal disagreements.
As the pandemic spread, global fuel demand plummeted by as much as 30% as lockdowns and grounded aircraft have reduced consumption.
US President Donald Trump has been reluctant to enforce cuts in domestic supply, after stating that production had decreased due to low prices. Although, on Wednesday Russia stated that these declines would not count as a proper cut.
Added to this, Saudi Arabia and Russia are struggling to agree on the levels the production cuts should be based on.
Speaking to Reuters, an anonymous Russian source said:
‘I’m not sure how Russia and Saudi Arabia would be able to iron out their differences today, it all could be stretched out.’
Sterling (GBP) Rallies despite UK GDP to Fall at ‘Speed and Magnitude’ Not Seen Before
The Pound was able to make gains today despite disappointing data showing the British economy stagnated in the three months to February.
Sterling was able to benefit from US Dollar (USD) weakness on Thursday, as risk appetite saw traders move away from traditional safe-haven currencies.
Data showed the British economy nearly stagnated between December and February, with GDP rising by just 0.1% before the coronavirus crisis escalated.
The UK is likely going to be pushed into a historic recession, and according to Capital Economics’ economist, Paul Dales, these figures will be the last that would look anything like normal for a while.
‘The coronavirus lockdown will mean that in March and April GDP will fall at a speed and magnitude no one has ever seen and no economy has ever experienced before.’
Pound Canadian Dollar Outlook: OPEC and US Jobs Data in Focus Today
Looking ahead, the Canadian Dollar (CAD) could suffer further losses against the Pound (GBP) following OPEC’s meeting.
If the meeting does not result in production cuts and sees tensions between Russia and Saudi Arabia increase, the ‘Loonie’ will fall.
Meanwhile, this afternoon’s US jobs data is in focus, as this could send traders flocking back to the safety of the US Dollar (USD) and away from Sterling.
If the US reports another jump in initial jobless claims, risk appetite will plummet and leave the Pound Canadian Dollar (GBP/CAD) exchange rate flat.