Pound Canadian Dollar (GBP/CAD) Exchange Rate Steady as ‘Loonie’ Benefits from Rising Oil Prices

September 11, 2019 - Written by John Cameron

STORY LINK Pound Canadian Dollar (GBP/CAD) Exchange Rate Steady as ‘Loonie’ Benefits from Rising Oil Prices

GBP/CAD Exchange Rate Flat as US-China Trade Tensions Ease

The Pound Canadian Dollar (GBP/CAD) exchange rate held steady at CA$1.625 today despite rising oil prices boosting confidence in the oil-reliant Canadian economy. This follows an increase in US crude oil futures which rose by 0.4% at $57.63 a barrel.

The Canadian Dollar has also benefited today as foreign exchange traders flee to safe-haven currencies like the ‘Loonie’ on expectations of a dovish European Central Bank rate statement on Thursday.

Meanwhile, US-China trade relations are showing signs of improving, with China waiving tariffs on some US imports ahead of October’s negotiations in Washington, in which the two superpowers will attempt to de-escalate trade tensions.

Iris Pang, an Economist for Greater China at ING, said that the manoeuvre could be interpreted as a ‘gesture of sincerity’ from China to the US.

Pang added:

‘There are still many uncertainties in the coming trade talks. An exemption list of just 16 items will not change China’s stance. We believe that China will stand very firm in the negotiations, which will be similar to the last round of talks.’

GBP/CAD Exchange Rate Rangebound as Labour Push for Second Referendum

The Pound (GBP) failed to gain against the ‘Loonie’ despite Labour Deputy Leader Tom Watson arguing that the Labour Party much ‘unambiguously and unequivocally’ back remain and a second referendum on Brexit.

However, Sterling traders have remained unmoved, despite the increasing likelihood of the Labour Party – the opposition pushing most strongly against a Tory-led no-deal – winning a general election if it manages to gain traction from potential Liberal Democrat voters seeking a more direct anti-Brexit message.

Mr Watson commented:

‘My experience on the doorstep tells me most of those who’ve deserted us over our Brexit policy did so with deep regret and would greatly prefer to come back; they just want us to take an unequivocal position that whatever happens we’ll fight to remain, and to sound like we mean it.’

Today also saw Scottish judges rule Prime Minister Boris Johnson’s suspension of parliament as unlawful. This has further heightened hopes that the UK Supreme Court could nullify the prorogation period, thus allowing opposition MPs to challenge the increasingly hard-Brexit Conservative Party.

GBP/CAD Outlook: Brexit Developments to Remain in Spotlight

Sterling investors will be awaiting tomorrow’s release of August’s RICS housing price balance, which is expected to ease from -9% to -11%.

Canadian Dollar traders, meanwhile, will be looking ahead to tomorrow’s publication of July’s new housing price index which is expected to flatten at 0%.

The GBP/CAD exchange rate will most likely be driven by the UK’s political developments tomorrow, with any signs of the Conservative’s begin challenge over their prorogation period likely to prove Pound-positive.

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TAGS: Canadian Dollar Forecasts Pound Canadian Dollar Forecasts