GBP/CAD Exchange Rate Rangebound as Oil Prices Rise on US-Iran Tensions
The Pound Canadian Dollar (GBP/CAD) exchange rate held steady today, with the pairing currently trading around CA$1.735.
The Canadian Dollar (CAD) has continued to climb after yesterday’s session saw the Western Texas Intermediate (WTI) prices rise to around $16 a barrel. Oil is one of Canada’s major exports, making up over 10% of its overall GDP.
As a result, the oil-sensitive ‘Loonie’ is beginning to make a steady recovery after this week’s collapse in the oil market saw crude prices fall into negative territory.
Oil prices gained ground yesterday after US President Donald Trump sparked US-Iran tensions after threatening to ‘shoot down and destroy’ any Iranian gunboats that ‘harass’ US ships.
Analysts at Rabobank said in a morning note:
‘It is perhaps the oldest Middle East oil trick in the book: you want higher oil prices, threaten to start breaking things.’
However, some analysts have highlighted that Canada’s oil industry remains in a grave predicable, with investment plans left in tatters as the global economy continues to battle the coronavirus pandemic.
Pound (GBP) Steady as Covid-19 Obliterates Retail Sales in March
The Pound (GBP) held steady against the Canadian Dollar (CAD) despite worse-than-expected retail sales in March.
The latest retail figures saw a significant fall from -0.3% to -5.1% last month as the nation’s coronavirus crisis severely limited sales.
Richard Lim, Chief Executive at Retail Economics, commented:
‘Retailers are in crisis mode as the impact of Covid-19 has obliterated sales to new record-lows.’
Meanwhile, Alan Curtis, the Head of UK Equities at Lazard Asset Management, said that the ‘real story will be seen in April’s figures when the lock-down will be fully felt by retailers.’
Sterling remains compromised, however, as there is still no sign of the UK’s peak of coronavirus cases.
Furthermore, Health Secretary Matt Hancock said that the nation’s lockdown measures would only be lifted when it was ‘safe to do so’, leaving many Pound investors anxious as the UK’s economy continues to suffer.
Mr. Hancock said:
‘I will not allow for changes to be made that are unsafe. We have got to keep the public safe. I understand the economic pressures and that is my background and I care deeply about that.’
GBP/CAD Forecast: Could Sterling Sink as Coronavirus Uncertainty Increases?
The Canadian Dollar (CAD) will remain sensitive to oil prices next week. If oil prices collapse once again, then we would see the oil-sensitive ‘Loonie’.
Pound (GBP) investors will be keeping a close eye on the UK’s coronavirus infections and fatality rates. Any indications that these could drop would offer relief to Sterling investors.
The GBP/CAD exchange rate could fall next week if there is no further news a possible lock-down easing plan.