Pound Canadian Dollar (GBP/CAD) Exchange Rate Climbs as Oil Prices Slip
(Updated 15:39 26/08/22)
The Pound Canadian Dollar (GBP/CAD) exchange rate is climbing higher today amid a slip in the price of crude oil.
Prices of oil per barrel fell on reports that the European Central Bank (ECB) could be considering a 0.75% interest rate hike. Additionally, traders of the commodity pulled bets back ahead of US Federal Reserve Chair Jerome Powell’s Speech at the Jackson Hole symposium.
The gains for the currency pair have come despite a worsening outlook for UK households with energy bills set to rise by 80%.
At time of writing the GBP/CAD exchange rate is at around $1.5341, which is up around 0.3% from this morning’s opening figures.
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Pound Canadian Dollar (GBP/CAD) Exchange Rate Trades Narrowly amid Risk-On Mood
The Pound Canadian Dollar (GBP/CAD) exchange rate is trending sideways today. Downbeat long-term prospects for the UK economy may be limiting gains for the currency pair. A rise in the price of oil could also we weighing on GBP/CAD.
On the other hand, the pair could be seeing losses limited by bets on future rate hikes from the Bank of England (BoE).
At time of writing the GBP/CAD exchange rate is at around $1.5289, virtually unchanged from the morning’s opening figures.
Pound (GBP) Drops as Energy Price Cap Rises by 80%
The Pound (GBP) is slumping against its rivals today. Fears over the UK economy’s long-term prospects are likely weighing on Sterling.
The raising of the energy price cap today and its impact on UK households could be pushing GBP lower today. Energy regulator OFGEM announced today that they would be increasing the price cap to £3549 from October due to soaring whole gas prices.
Experts have highlighted the harmful impact the soaring cost of energy could have on household budgets, and the economy at large.
Torsten Bell, chief executive of the Resolution Foundation, had the following to say on the harm to households this winter:
‘“Winter energy bills are set to average around £500 a month, while pre-payment customers will need to find over £700, more than half their disposable income, to keep the heating on in January alone. These costs pose a serious threat to families’ physical and financial health.’
The prospective further rise inflation could be bolstering Sterling off of bets on BoE interest rate hikes, however.
Canadian Dollar (CAD) Ticks Higher amid Uptick in Oil Prices
The Canadian Dollar (CAD) is edging higher today. A risk-on mood and uptick in crude oil prices may be lending support to the commodity-tied ‘Loonie’.
The price per barrel of crude oil rose by nearly $1 today amid signs of improved demand. An increase in traffic levels across the globe helped to ease fears of a fall in fuel consumption.
Drastic gains for the commodity were capped by cautious bets ahead of a speech by US Federal Reserve Chair Jerome Powell later today.
The prospect of further interest rate hikes from the Bank of Canada (BoC) may also be propping up CAD today. Figures released on Thursday indicated record-high levels of job vacancies, with evidence of a tight labour market giving the BoC the green light push forward.
GBP/CAD Exchange Rate Forecast: Will GDP Figures Help to boost CAD?
Looking to the coming week for the Pound, the final reading of August’s PMIs for the private sector could see losses for the currency on Thursday. The indexes are expected to fall which could contribute to the UK’s poor forward outlook.
The impact of the UK’s cost-of-living crisis could also weigh on the Pound in the coming week. The announcement of any government support could restore some confidence in the beleaguered currency.
For the Canadian Dollar, a forecast rise in second quarter current account figures could boost the currency on Tuesday.
Wednesday’s GDP figures could also see CAD rise if they print as forecast. The Canadian economy is forecast to have expanded in the second quarter of 2022 with an uptick in growth.
A slip to manufacturing output could cap any gains if PMI figures print as forecast on Thursday, however.
Finally for the ‘Loonie’, any further fluctuations in the price of crude oil could also prompt movement in the currency.