Pound Canadian Dollar (GBP/CAD) Exchange Rate Fluctuates as Cost-of-Living Crisis is Set to Worsen
The Pound Canadian Dollar (GBP/CAD) exchange rate is zigzagging as soaring UK energy bill fears compound mounting recession fears.
At time of writing, the GBP/CAD exchange rate is around CA$1.5560, relatively unchanged from this morning’s opening levels.
Pound (GBP) Wavers as Households Feel Crunch of Cost-of-Living Crisis
The Pound (GBP) is trading narrowly against its peers today as a lack of data has left Sterling open to market sentiment. The cost-of-living crisis set to worsen, highlighted by the dire economic outlook given by the Bank of England (BoE).
Experts at Uswitch are warning that the UK is already burdened by soaring energy prices. Before the impending rising energy bill prices kick in, the UK’s energy debt is already an all-time high. The overall debt bill is three times the size of this time last year, and will grow over the winter. With energy bills set to skyrocket in the autumn, rising by more than 80%, experts fear for households in the coming months. Justina Miltienyte, Head of Policy at uSwitch, said of the report:
‘This is an alarming situation, as summer is traditionally a time when households are using less power for heating, which helps bill payers to build up energy credit ahead of the winter.’
Ahead of the looming energy bill hike, ministers are set to meet with energy supplier executives. The chancellor Nadhim Zahawi and business secretary Kwasi Kwarteng will meet with gas and electric bosses, as they consider increasing the windfall tax. Energy companies have been enjoying record profits since the energy crisis began, exacerbated by the Ukraine crisis. An increased levy could help tackle the cost-of-living crisis.
Canadian Dollar (CAD) Remains Under Pressure amid Turbulent Oil Prices
The Canadian Dollar (CAD) is struggling for demand today as the market remains cautious ahead of the US inflation reading. With global market sentiment wavering, oil prices hover around the $90 a barrel mark, keeping a firm lid on the Canadian Dollar.
Reports of Russia halting further gas shipments initially saw oil prices climb. But they soon dipped again as shortages proved to be short-lived. Western sanctions prevented payments from Moscow which halted gas flows on the southern route of the Druzhba pipeline.
Earlier in the session, China’s annual CPI posted a smaller-than-expected rise for the month of July. But a fall in the ‘core’ reading (excluding food), showed that inflationary pressures are at least well contained. However, with the geopolitical tensions still lingering around Taiwan, chances of a waning global market mood could hamper the ‘Loonie’ further.
Pound Dollar Exchange Rate Forecast: US Inflation to Weigh on Global Risk Sentiment?
The market remains cautious as it awaits inflation data for the US. If CPI reading prints lower than expected, future rate hike bets could be slashed, denting global market sentiment.
Elsewhere, BoE Chief Economist Huw Pill will be attending a Q&A session later today, any further hints on future rate hikes will be closely monitored, potentially swaying the Pound.