Pound Canadian Dollar (GBP/CAD) Exchange Rate Falls Ahead of OPEC+ Meeting

August 17, 2020 - Written by John Cameron

STORY LINK Pound Canadian Dollar (GBP/CAD) Exchange Rate Falls Ahead of OPEC+ Meeting

Pound Sterling Canadian Dollar (GBP/CAD) Exchange Rate Slumps as Oil Prices Steady

The Pound Sterling Canadian Dollar (GBP/CAD) exchange rate edged -0.3% lower on Monday. This left the pairing trading at around CA$1.7317.

The oil-sensitive ‘Loonie’ was able to edge higher today as oil prices were steady, although remained flat against the Pound.

Prices were offered support after the news China planned to ship large volumes of US crude during this month an September, which countered the deteriorating relations between the two countries and this weekend’s delay to the six-month review of the Phase 1 deal.

Washington and Beijing delayed their review of the Phase 1 deal which was initially scheduled for Saturday, citing scheduling conflicts.

However, this boosted risk sentiment as it meant the US-China trade deal was left intact and relations have not deteriorated further.

Added to this, in an upbeat signal, Chinese state-owned oil firms have booked tankers to move at least 20 million barrels of US crude in August and September.

Record crude oil imports from China and the easing of coronavirus lockdown restrictions have supported prices recently. However, new waves of Covid-19 have caused several countries to begin to ease consumption once again.

Meanwhile, investors are also looking for clues on future supply as OPEC+ are scheduled to meet this week.

Sterling (GBP) Slides as UK Household Financial Health Deteriorates

Meanwhile, the Pound suffered losses against the Canadian Dollar as data showed the financial health of UK households deteriorated at a faster pace this month.

This was a disappointing sign for Britain’s economic recovery from the coronavirus crisis, and weighed on Sterling.

Markit’s Household Finance Index slumped from 41.5 in July to 40.8 in August due to the biggest slump in job security since 2011.

The British currency struggled as a wave of layoffs is already underway, and markets fear this will be a lot worse once the government ends its furlough scheme in October.

Commenting on this morning’s data, Markit’s economist, Lewis Cooper said:

‘Overall, the data hint at some worrying trends when put in the context of the significant recession facing the UK.

‘Incomes from employment fell sharply again, while the survey measure of job security perceptions remained firmly in negative territory as the winding down of the government’s furlough scheme looms.’

Pound Canadian Dollar Outlook: British and Canadian Inflation in Focus Today

Looking ahead, traders will be focused on the upcoming Inflation data from the UK which could allow the Pound (GBP) to claw back some losses against the Canadian Dollar (CAD).

If the latest UK inflation shows further signs of a recovery from the coronavirus-induced slump it will boost Sterling.

Meanwhile, the ‘Loonie’ could slump further following the release of the latest Canadian inflation data.

If inflation disappoints and eases more than expected in July it will send the Pound Canadian Dollar (GBP/CAD) exchange rate higher on Wednesday afternoon.

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TAGS: Pound Canadian Dollar Forecasts