Hopes of Further OPEC Production Cuts Drag on Pound Canadian Dollar (GBP/CAD) Exchange Rate
Reports suggesting that OPEC may discuss deepening its oil production cuts when it meets on Thursday helped to push the Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate lower.
Oil prices continued their rally in the wake of the reports, driving Brent crude close to the US$63 per barrel mark.
This encouraged the commodity-correlated Canadian Dollar (CAD) to gain ground against many of the majors as markets bet on the prospect of prices rising further in the months ahead.
CAD exchange rates also found support on the back of the second quarter capacity utilisation rate, which strengthened from 81.1% to 83.3%.
With production picking up signs point towards the Canadian economy gaining further momentum, encouraging hopes for another quarter of solid growth.
GBP Exchange Rates Brace for Latest UK House Price Decline
Pound Sterling (GBP) struggled to find support ahead of tonight’s RICS house price balance as investors braced for another disappointment.
With the balance expected to weaken from -9% to -10% in August markets are likely to find fresh cause for concern over the economic outlook.
Lower levels of confidence among homeowners could signal weakening demand across the wider economy, potentially dragging on the quarterly growth rate.
As investors remain wary of the prospect of a potential technical recession this left the GBP/CAD exchange rate on the back foot.
The prospect of fresh political unrest, after Scottish judges ruled that the prorogation of parliament was unlawful, also dragged on the Pound over the course of the day.
Weak Housing Data May Drag Down Canadian Dollar
Demand for the Canadian Dollar could easily falter tomorrow, though, if July’s new housing price index fails to impress.
Forecasts point towards the index holding steady at -0.2% on the year, suggesting continued weakness within the domestic housing market.
In spite of the relative strength of other recent economic data, a poor showing here could still prompt market jitters and weigh on CAD exchange rates.
As central banks around the world shift towards a dovish policy outlook investors remain wary of data that could push the Bank of Canada (BOC) back towards an easing bias.
GBP/CAD Exchange Rate Vulnerable as Political Uncertainty Continues
Political developments still look set to steer the movement of GBP exchange rates in the days to come.
Downing Street’s refusal to recall parliament in spite of the Scottish ruling may set the stage for a fresh political showdown, stoking market anxiety.
Even though the odds of a no-deal Brexit scenario have declined since MPs passed a bill compelling the prime minister to ask for a potential extension the Pound remains vulnerable.
In spite of parliament’s absence, the GBP/CAD exchange rate could still come under pressure ahead of the weekend as politicians prepare for their next confrontation.