Pound to Canadian Dollar Forecast: GBP/CAD Exchange Rate Weakens as Oil Prices Improve

December 15, 2014 - Written by Ben Hughes

STORY LINK Pound to Canadian Dollar Forecast: GBP/CAD Exchange Rate Weakens as Oil Prices Improve

Currency News UK Brings You Our Latest Pound Sterling Forecast Versus the Canadian Dollar

The Pound softened against the Canadian Dollar as the North American currency received support from a rise in oil prices.

Crude oil is Canada’s most traded export any improvement in prices is a positive for the ‘Loonie’ especially since oil prices have fallen sharply in recent months.

Earlier, the United Arab Emirates, a member of the Organisation of Petroleum Exporting Countries (OPEC), said that the body would not rein in production in response to slumping prices. The UAE’s energy minister Suhail Al-Mazrouei said that OPEC would not cut output of the commodity even if prices fall as low as $40 per barrel.

Despite that, Oil prices made their biggest increase in two weeks on speculation that production of the commodity could contract from two major oil-producing nations. Both Libya and Nigeria experienced disruptions to production. Combined both countries account for around 9% of global oil production.

Oil prices rose as rival Libyan forces clashed over two of the North African nation’s oil terminals. The Ras Lanuf and Sidra terminals were closed as government forces clashed with rebels who control large parts of the west of the country.

‘Air force jets and helicopters struck the fighters as they advanced on Al-Sidra oil terminal. The air raids had caused a large number of casualties,’ said Brigadier –General Saqr Jarushi.

Libya declared force majeure on both ports, which protects them against claims from oil buyers for losses from the disruption. The latest skirmishes and closure of the oil terminals, which account for about 300,000 barrels of oil exports daily.

‘Libya may have helped the market stay above $60. Maybe some optimists think that $60 marks the bottom of the market, but I can see nothing to support that theory,’ said Christopher Bellew, senior broker at Jefferies International Ltd.

Canadian Dollar to US Dollar Exchange rate Forecast

Against the US Dollar, the Canadian Dollar gave up earlier gains as the US currency strengthened ahead of Wednesday’s Federal Reserve policy meeting.

As the USD, made gains the CAD slipped back to a fresh five-year low.

The US currency found support after economic data showed that industrial production in the world’s largest economy increased by 1.3% in November.

The figure beat expectations for a rise of 0.7%. Further gains for the currency were restrained as the Federal Reserve Bank of New York reported that its general business conditions index came in at -3.5, a sharp drop from the preceding month’s figure of 10.16.

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