Pound Sterling Canadian Dollar (GBP/CAD) Exchange Rate Slides on Oil Price Gains
The Pound Sterling Canadian Dollar (GBP/CAD) exchange rate slumped by around -0.8%, leaving the pairing trading at around CA$1.7381.
The oil-sensitive ‘Loonie’ was able to make gains this morning as oil prices rose over 3% on Friday.
However, prices were set for their worst weekly performance since the 2008 financial crisis as coronavirus fears weighed on demand.
Commenting on this, Michael McCarthy, chief market strategist at CMC Markets said:
‘It’s been a very rough week and so it’s not impossible people are locking in ahead of the weekend.
‘I would also point out that in the context of the recent moves it’s not really a major move.’
Prices were under pressure as Saudi Arabia and the United Arab Emirates flooded the market with low-price oil after a price agreement with Russia collapsed last week.
According to Goldman Sachs:
‘The surge in low-cost production is signiﬁcantly larger than expected with the collapse in demand due to the coronavirus looking increasingly broad.’
Sterling (GBP) Slumps on Lack of UK’s Stringent Coronavirus Measures
The Pound slumped this morning as markets were disappointed by the UK’s response to the coronavirus pandemic.
Britain has now moved from ‘containing’ the virus to the ‘delay’ phase. Although the lack of stringent measures have been widely criticized.
While the number of confirmed cases in the UK reached 596, health officials have warned that the actual number of those infected is likely to be between 5,000 and 10,000.
Added to this, European leaders have warned that the situation will get worse before it gets better. Speaking at a news conference, Prime Minister Boris Johnson stated:
‘It’s going to spread further. I must level with you, level with the British public – more families, many more families, are going to lose loved ones before their time.’
Meanwhile, the United States announced a 30 travel ban to Europe. While the flight ban did not include the UK, this was a clear sign of an escalating crisis.
Added to this, economic stimulus measures announced by the European Central Bank (ECB) fell short of expectations and disappointed markets.
Pound Canadian Dollar Outlook: Coronavirus Pandemic in Focus
Looking ahead to next week, the Canadian Dollar (CAD) could suffer some losses against the Pound (GBP) on weaker oil prices.
If prices suffer a significant decline, and coronavirus continues to throttle demand, the oil-sensitive ‘Loonie’ will slide.
Meanwhile, investors will continue to focus on the coronavirus pandemic. If the UK announces stricter measures to delay the spread of the virus, the Pound Canadian Dollar (GBP/CAD) exchange rate will rise.