Canadian Dollar Exchange Rate Today - GBP/CAD Higher on Risk Aversion

Modified: Monday, 16 June 2014 22:55 BST - Written by Ben Hughes

STORY LINK Canadian Dollar Exchange Rate Today - GBP/CAD Higher on Risk Aversion

Canadian Dollar Exchange Rate Today: The Pound (GBP) was stronger against the Canadian Dollar (CAD) exchange rate on Monday as investors chose to shy away from the riskier commodity based currency as the situation in Iraq continued to spook the markets.

The situation in the Middle East deteriorated further after Sunni militants led by the Islamic State in Iraq and the Levant (ISIS) captured the northern Iraqi city of Tal Afar. On Monday, the Pound Canadian Dollar exchange rate is valued 0.02pct lower on the day at 1.84323 GBP/CAD and the Euro to Canadian Dollar exchange rate is values 0.09pct lower at 1.47126.

Fighting around the city began on Sunday as the terrorist forces bombarded the city with mortar fire. The fall of the city was a further blow to the Iraqi government who in recent days has lost control of large swathes of the country. The nation’s second largest city of Mousl and the city of Tikrit both fell last week after ISIS forces launched a surprise Blitzkrieg assault.

Concerns rose that there could be a new Gulf War after rumours circulated that the USA could make a deal with long time foe Iran in coming up with a way to help the Iraqi government fight back.

Demand for riskier assets was also under pressure from an increase in tensions between Ukraine and Russia after the latter cut gas supplies to the former. The Russian gas company Gazprom said that the deadline for Ukraine to pay its outstanding debts had passed at 6:00am GMT.

"Today, from 10:00 Moscow time, Gazprom, according to the existing contract, moved Naftogaz to prepayment for gas supplies," Gazprom said in a statement on Monday morning."From today, the Ukrainian company will receive Russian natural gas only in the amounts it has paid for."

As a result of the geopolitical tensions the price of oil has risen and demand for rare metals such as gold has increased.

“Crude oil prices are higher again on Monday despite a fight-back from government forces in Iraq. As such, US markets look set to open lower awaiting possible American military intervention. Investors will be watching the news wires for military reaction from the United States, Any intervention will give investors’ confidence that the U.S. government is willing to act to prevent a supply shock in crude oil, and that could contain oil prices. Unfortunately, the citizens of Iraq look set to see further instability but supplies of oil probably will not,” said an analyst from CMC Markets.


Canadian Dollar Exchange Rate Forecast - Under Pressure

Further losses for the Canadian Dollar were somewhat limited after data released by Statistics Canada showed that foreign investment into the North American nation increased by a seasonally adjusted figure of C$10.13 billion in April, well above economist expectations for a figure of C$3.27 billion. Foreign investors sold C$1.41 billion worth of Canadian securities in March.

The Pound was finding support from comments made by the Bank of England’s Deputy Governor Charlie Bean who said in an interview with a Sunday newspaper that he was eager to see an interest rate increase as it would be an iconic step in showing that the UK economy has stabilised. Speculation that an interest rate rise could occur before the end of the year increased as Bean’s comments added to last week’s speech given by Governor Mark Carney suggest that a rate rise is on the cards before the year’s end.

With a lack of market moving domestic data until the end of the week the Canadian Dollar is likely to remain under pressure as events in Iraq and Ukraine unfold. Any escalation in the Iraq conflict will see further falls in demand for riskier assets and will see currencies such as the Japanese Yen and Swiss Franc make further gains against its most traded peers.

Key Canadian Dollar (CAD) Exchange Rates Today - 16/06/2014

The Pound Sterling to Canadian Dollar exchange rate is trading down -0.02% at 1.84323 GBP/CAD.
The Euro to Canadian Dollar exchange rate is trading up +0.09% at 1.47126 EUR/CAD.
The US Dollar to Canadian Dollar exchange rate is trading down -0.08% at 1.08504 USD/CAD.
The Canadian Dollar to Australian Dollar exchange rate is trading up +0.02% at 0.98094 CAD/AUD.
The Canadian Dollar to Euro exchange rate is trading down -0.09% at 0.67969 CAD/EUR.
The Canadian Dollar to Pound Sterling exchange rate is trading up +0.02% at 0.54252 CAD/GBP.
The Canadian Dollar to New Zealand Dollar exchange rate is trading down -0.14% at 1.06158 CAD/NZD.
The Canadian Dollar to US Dollar exchange rate is trading up +0.08% at 0.92163 CAD/USD.

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