Renewed Losses Forecast for Oil, Attendant Gains for GBP NOK and GBP CAD Predicted

January 18, 2016 - Written by Minesh Chaudhari

STORY LINK Renewed Losses Forecast for Oil, Attendant Gains for GBP NOK and GBP CAD Predicted

Norwegian Krone and Canadian Dollar Under Pressure from Low Oil Prices

Friday’s session brought a renewed slump in global oil prices which saw the price of a barrel of Brent Crude drop to just above the $29 level at one point.

The fall-out saw investors move en masse out of the oil-driven Norwegian Krone (currency : NOK) and the Canadian Dollar (currency : CAD).

Iran Sanctions Officially Lifted; Adding Further Headwinds for Oil Prices

However, holders of NOK and CAD denominated assets did not have to wait long before the next bout of bad news arrived.

The global currency markets shut down when New York closes every Friday and re-open for business 48 hours later. However, the weekend market close often yields significant news and this weekend was no exception; economic sanctions against erstwhile pariah state Iran, which have been in place for four decades, were officially lifted on Saturday following confirmation from official inspectors that the Tehran administration had taken the necessary steps to curb its nuclear programme.

The upshot will see Iran release 500,000 barrels of ‘Black Gold’ per year onto the international markets, (the Persian state was banned from selling oil during its long stint in the wilderness).

Analysts forecast that this increase in global supply will help send the price of a barrel of Brent down from the $29 level which it stood at when the markets closed on Friday and early indications suggest that these assumptions could well be correct.

GBP to NOK and GBP to CAD Exchange Rates Predicted to Rally as Oil Slides

Equities markets in the Gulf States are open for ‘business as usual’ every Sunday and yesterday’s trading session saw heavy losses for the stock indices of Saudi Arabia, Qatar and Dubai.

These energy-heavy exchanges lost 7.4%, 7.0% and 4.6% respectively, leading analysts to forecast similar losses for oil and the shares of oil companies when trading gets underway in London and the euroland’s bourses today.

Standard Chartered’s prediction last week that oil will tumble to as low as $9 per barrel now appears a distinct possibility and a move towards this level will see gains of an equal magnitude for the GBP NOK and GBP CAD exchange rates.

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TAGS: Canadian Dollar Forecasts Norwegian Krone Forecasts Pound Canadian D Forecasts