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Exchange Rate Forecasts: Oil Prices to Hit US Dollar (USD), Norwegian Krone (NOK) & Canadian Dollar (CAD)

January 13, 2015 - Written by John Cameron

Currncy News UK Presents Our Latest Pound Sterling, Dollar, Norwegian Krone and Canadian Dollar Exchange Rate Forecasts



The price of a barrel of Brent Crude oil slumped to its lowest level for six years during yesterday’s trading session following the publication of a note from a leading analyst which forecast that oil prices will remain at or below their current level for the first half of this year, and potentially longer. The news caused commentators to adjust their forecast for several leading global currencies.

We take a closer look at the development’s possible effects below –

Canadian Dollar to Pound Exchange Rate Gives Up Ground



The CANADIAN DOLLAR (currency:CAD) was one of the worst-performing units during yesterday’s session, sending the Pound Sterling CAD exchange rate back up through the 1.8000 level.

The pair touched an intraday high of 1.8162 as investors factored-in the renewed downward movement in the price of oil. Last Friday’s disappointing Canadian labour market numbers, which suggested a tailing off in the level of job creation, also held back the Loonie on the day. The outlook for the Canadian unit is now NEUTRAL TO NEGATIVE.

Norwegian Krone Exchange Rate Slumps on Oil Shock



The NORWEGIAN KRONE (currency:NOK) put in a similarly underwhelming performance against the Pound during trading yesterday; at one point the GBP NOK exchange rate improved to 11.7682 as investors abandoned the currency of Western Europe’s number one oil producer. Concerns regarding the continued lacklustre performance of the euroland economy also weighed on the NOK.

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The pound is locked in a gradual but pronounced uptrend against the Norwegian tender and the NOK outlook is NEUTRAL TO NEGATIVE.

Lower Oil Prices Hit US Fracking Industry



The US DOLLAR (currency:USD) struggled to assert itself against the Pound yesterday, sending the GBP USD exchange rate up to close to 1.5200 during the latter stages of the North American trading session.

The US was the largest net importer of crude oil in the aftermath of the 2008 credit crisis, but the advent of fracking during the intervening period has made the world’s number one economic superpower almost self sufficient.

Goldman Sachs forecasts that the lowering of oil prices will hit America’s nascent fracking industries hard, so the Buck weakened.

The US Dollar forecast is to trade with a NEUTRAL bias moving forward.
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