GBP/CAD Exchange Rate Dips Ahead of OPEC Meeting
The Pound to Canadian Dollar (GBP/CAD) exchange rate dipped today, with the pairing currently trading around CA$1.727.
The Canadian Dollar (CAD) rose last week after the commodity-linked currency benefited from gains in WTI crude oil, which held above $45 per barrel.
However, this week saw oil prices begin to dip ahead of the Opec meetings.
If the caret agrees to stick to supply curbs, then the ‘Loonie’ would suffer.
Ian Nieboer, the head of research at Enverus, commented:
‘Oil at $45 takes you out of the ICU. But there is still a ways to go before you declare shale healthy again. That’s why Opec is so important.’
In Canadian economic news, today saw the release of the latest Building Permits data for October, which fell considerably below forecasts from 18.6% to -14.6%.
As a result, CAD traders are becoming increasingly concerned about Canada’s economic recovery in the months ahead.
Nonetheless, following last week’s commentary from the Bank of Canada (BoC), ‘Loonie’ investors are cautiously hopefully about a Covid-19 speeding up the nation’s economic recovery.
Pound (GBP) Sinks as Brexit Uncertainty Returns in Crucial Week
The Pound (GBP) fell against the Canadian Dollar today as growing uncertainty over Brexit has limited the appeal of Sterling.
Last week saw Michel Barnier, the EU’s Chief Brexit negotiator, bemoan the lack of progress in UK-EU talks.
As a result, GBP investors are becoming increasingly jittery over the increasing prospect of a no-deal Brexit at the end of the year.
Meanwhile, today saw the news that UK consumer credit had dropped to levels not seen since 1994.
The coronavirus pandemic prevented people from spending as much as they normally would, leaving the UK economy in an uncertain situation as the year draws to a close.
The Bank of England (BoE) commented:
‘Since the beginning of March, households have repaid £15.6 billion of consumer credit. As a result, the annual growth rate fell further in October to -5.6%, a new series low since it began in 1994.’
Meanwhile, UK markets are remaining cautious as the outlook for the British economy remains largely uncertain, with Brexit and the Covid-19 crisis set to wrack the economy in the months ahead.
GBP/CAD Outlook: Brexit Jitters Likely to Cap Sterling’s Gains
Canadian Dollar (CAD) investors will be awaiting tomorrow’s release of the latest Canadian GDP figure for the third quarter.
Any improvement in the Canadian economy in the third quarter would prove CAD-positive.
Tomorrow will also see the release of the latest UK Markit Manufacturing PMI for November.
If this shows a marked improvement in the British manufacturing sector, then we could see the GBP/CAD exchange rate head higher.
However, Brexit developments could keep the Pound capped this week, as UK market remain cautious as the UK and EU attempt to secure a post-Brexit trade agreement.