Pound to Canadian Dollar - GBP/CAD Exchange Rate Weakens on Oil Price Rise

February 16, 2015 - Written by David Woodsmith

STORY LINK Pound to Canadian Dollar - GBP/CAD Exchange Rate Weakens on Oil Price Rise

Latest Canadian Dollar Forecasts vs the Pound Sterling

The Pound Sterling to Canadian Dollar exchange rate weakened as crude oil prices increased to trade in the $61 per barrel region and as investors looked ahead to UK inflation data due for release tomorrow.

Oil prices increased after the oil minister in Kuwait said that lower supply levels of the commodity would lead to further price rises in the second half of the year. Also supporting oil prices are signs that the industry is investing less and that the number of oilrigs in the USA has fallen.

The price of oil could rise further as military action against the Islamic State and its terrorist affiliates intensify. Jordan has stepped up its bombing campaign against IS targets in Iraq and Syria whilst Egypt launched air strikes against IS positions in Libya following the execution of 21 Egyptian Christians.

The oil supply out of Libya is already under strain as the country’s El Sarir oilfield remains out of action after a pipeline was destroyed over the weekend.

‘Now we need to watch and see if $60 can hold as a support line. I think that is really the level to watch on Brent. The geopolitical rise is not something to write off,’ said Olivier Jakob, oil analyst at Petromatrix in Zug, Switzerland.
The Canadian Dollar meanwhile was under pressure due to the closure of the nation’s markets for the Family Day National Holiday and strike action by 3,000 train drivers and conductors. The strike at the Canadian Pacific Railway is likely to negatively affect a number of major industries throughout North America.

Vulnerable to the strike action are sectors such as the oil industry, car manufacturers, lumber suppliers and mining companies. A prolonged strike could have repercussions in the USA too as many US companies use the railway to transport goods.

The Pound Sterling gave up earlier gains as economists fret that tomorrows UK Inflation data could show a negative rate.
With North American markets closed for holidays most of the market’s attention is focused on Europe and on today’s crunch meeting of Eurozone finance ministers. Hopes for a compromise over the Greece situation are supporting the single currency.

Hopes are dim that a deal will be reached as even before the meeting began the Greeks and Germans took swipes at each other. If no deal is reached then the ‘Loonie’ could soften, as investors are likely to seek shelter in safer assets.

International Money Transfer? Ask our resident FX expert a money transfer question or try John's new, free, no-obligation personal service! ,where he helps every step of the way, ensuring you get the best exchange rates on your currency requirements.

TAGS: Canadian Dollar Forecasts Currency Predictions Daily Curre Forecasts