Pound Canadian Dollar Exchange Rate Firms as Hunt Prepares Speech Today
The Pound Canadian Dollar (GBP/CAD) exchange rate is finding support this morning as new Chancellor of the Exchequer Jeremy Hunt brings forward mini budget overhaul by two weeks.
At the time of writing the GBP/CAD exchange rate is trading around CA$1.5589, which is up about 0.4% from this morning’s opening rate.
Pound (GBP) Rallies as Hunt to Deliver Emergency Statement
The Pound (GBP) is up against a lot of its peers this morning as markets await an statement from Hunt outlining the government’s new fiscal plans.
According to reports, Hunt also plans to ditch two-thirds of Kwasi Kwarteng’s original £65bn budget. The chancellor will also announce new spending measures. Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown said:
‘[F]illing the black holes in the government’s finances will be far from easy so highly unpalatable spending cuts across government departments are also expected. Jeremy Hunt had already been setting the scene for this bonfire of tax cuts over the weekend.’
‘Since the emergency budget statement was announced, it’s gained further ground. But Sterling is still weaker than before Kwasi Kwarteng was ruthlessly axed, with the chief architect of the disastrous mini-budget still, for now, in place.’
The response by financial markets will be key in determining the direction of the Pound this week. A negative reaction could be the final straw for Liz Truss’s premiership with the resulting political uncertainty likely to weigh on the Pound.
Canadian Dollar (CAD) Mixed as Oil Prices Recover
The Canadian Dollar (CAD) is trading in a broad range this morning as the crude oil market begins its recovery from last week’s price drop.
At the time of writing WTI crude oil is trading around $85 per barrel. This uptick has attributed to by a dip in the US Dollar (USD) and hopes that new policies from China would bolster oil prices.
However, adding uncertainty to the oil market is The Organization of the Petroleum Exporting Countries (OPEC), who are limiting oil production in November.
Analysts at ANZ Research has said:
‘Tighter inventories for oil and oil products along with looming supply risks should keep prices volatile’.
Pound Canadian Exchange Rate Forecast: GBP to Enjoy Tailwinds amid Hunt Speech?
The Pound Canadian Dollar exchange rate could see significant movement later today as Jeremy Hunt delivers his fiscal statement.
Hunt will be hoping his statement will help to calm markets. The failure to do so could lead to fresh volatility in Sterling as it raises considerable doubts over the future of the current government.
Looking at CAD, in the absence of any data, the commodity-linked ‘Loonie’ will likely remain subject to oil price dynamics.