Pound Canadian Dollar Exchange Rate Flat as Markets Brace for Tory Election Results
The Pound Canadian Dollar (GBP/CAD) exchange rate is trading sideways as GBP investors wait for the outcome of the Conservative leadership race.
At the time of writing the GBP/CAD exchange rate is trading at around CA$1.5120, which shows a 0.10% drop from this morning’s opening rate.
Pound (GBP) Mixed as GBP Investors Wait on Leadership Announcement
The Pound (GBP) is mixed this morning as investors wait on the announcement of the next prime minster, leaving the Pound Canadian exchange rate to trade sideways.
GBP investors seem cautious this morning ahead of the Conservative leadership race results and generally downbeat domestic headlines.
Liz Truss, the Conservative leadership front runner is reportedly planning an energy bill freeze, which would help many UK households tackle the new energy cap ahead of winter.
Daily Telegraph writers Ben Riley-Smith and Tony Diver gave insight based on insider information:
‘One energy company source said the idea has been ‘extremely actively explored’ by Truss campaign figures and that Kwasi Kwarteng, the Business Secretary tipped to become Chancellor if Ms Truss wins, appeared ‘very open’ to options for a freeze.’
Whilst investors wait on the outcome of the leadership race, UK data could impact trading. The final print for August’s Service PMI released this morning and reported a larger-than-expected slowing of service sector growth. With nothing to cheer investor mood, the Pound will likely remain muted ahead of expected volatile political trading later today.
Canadian Dollar (CAD) Mixed as despite Jump in Oil Prices
The Canadian Dollar (CAD) is sluggish this morning despite a robust uptick in crude oil prices.
WTI crude oil is currently trading at $89 per barrel this morning, down from $94 this time last week, but up 2% on the day.
The rebound in oil prices comes as OPEC members are reportedly considering implementing new oil production cuts in October.
Meanwhile, the speculation that Bank of Canada (BoC) could raise interest rates as much as 75bps on Wednesday appears to be lending some support to the ‘Loonie’.
In the meantime, CAD exchange rates may continue to be driven by oil price dynamics.
Pound Canadian Forecast: Exchange Rate to be Driven by UK Politic
The Pound may become more volatile as markets begin to speculate on the economic priorities of likely winner Liz Truss.
Truss has said that if she becomes PM she will have a plan to deal with the next energy price cap by the end of the week. GBP investors will be hoping for decisive action and the Pound may be vulnerable to losses if Truss’ plan is seen as half-baked.
Meanwhile, movement in the Canadian Dollar may remain limited as investors avoid making any bullish bets ahead of the BoC’s latest interest rate decision.