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GBP to CAD Exchange Rate Near Half-Month-Low as Uncertainty Bubbles over Brexit and Oil Prices

November 30, 2020 - Written by James Fuller

The British Pound to Canadian Dollar (GBP/CAD) exchange rate tumbled at the end of last week, but movement in the pair has been highly mixed this week so far. Concerns about how the Brexit process will unfold in the final month of the Brexit transition period are increasingly taking focus for the Pound outlook, while the Canadian Dollar’s appeal is limited as oil prices see mixed movement on global shifts in coronavirus speculation and risk sentiment.

After opening last week at the level of 1.7400, GBP/CAD briefly jumped higher. GBP/CAD touched on a high of 1.7492, the best level for the pair in over a quarter, since the beginning of August.

However, GBP/CAD quickly recoiled from that high and spent the remainder of the week sliding lower. GBP/CAD ultimately fell below the week’s opening levels, closing at the level of 1.7302 for the weekend, around a cent lower.

Since markets opened this week, GBP/CAD has seen more mixed movement. A brief jump this morning was short-lived, and at the time of writing GBP/CAD trends closer to today’s half-month-low of 1.7268.

GBP Exchange Rates Jittery as Divergence Remains in Brexit Negotiations



Over the past week, hopes that a UK-EU Brexit deal is close have gone from very high to full of uncertainties.

Amid a lack of major progress in recent weeks, fears that negotiations could run out of time and end in a no-deal Brexit are returning. The considerable optimism shown by UK and EU officials a few weeks ago has also softened.

While Britain’s economy continues to be damaged by the coronavirus pandemic, Brexit is returning to the centre stage of the Pound outlook.

What’s more, concerns about the pandemic’s impact on Britain are combining with concerns that a thin Brexit deal will not be enough to help Britain’s economy significantly. Stephen Gallo, European Head of FX Strategy at BMO Capital Markets, said:

‘The UK is likely to face adjustment pressures from the twin factors of COVID-19 and Brexit with or without a limited FTA (Free Trade Agreement) in place from January 1, 2021, and there is scope for more friction in the bilateral UK/EU relationship going forward,

Regardless, the UK’s twin fiscal and current-account deficits will probably curb GBP appreciation for the time being, and their persistence could pose medium-term inflation risks to the UK economy,’


EU sources also reportedly said today that ‘massive divergences’ persisted on three big areas of UK-EU negotiations, with only a month to go until the end of the Brexit transition period.

CAD Exchange Rates Jittery as Market Rallies Pause



Assets correlated to risk and market sentiment, including commodities like oil, have seen strong performance in recent weeks due to hopes that the global economy will recover from the coronavirus pandemic next year.

After days of strong performance though, this rally is pausing today.

Investors are selling prices of oil from their highs as a result of this, as well as anticipation for an upcoming OPEC+ meeting of oil producing nations.

According to Neil Wilson, Chief Market Analyst at Markets.com:

‘Whilst there seems to be broad agreement on extending current level of cuts for some time beyond the start of the year, the United Arab Emirates and Kazakhstan are thought to be dissenting,’


As oil is Canada’s biggest export, the Canadian Dollar is often correlated to oil prices. Weakness in oil today is weighing on the Canadian Dollar, so the Canadian Dollar’s own strength is softening and the Pound to Canadian Dollar is avoiding losses.

GBP/CAD Exchange Rate Forecast: Key Canadian Data Due Tomorrow



The Pound to Canadian Dollar exchange rate is jittery for now, but upcoming UK and Canadian news could cause a big shift in movement in the coming sessions.

If there are any optimistic developments in UK-EU Brexit negotiations, the Pound is more likely to strengthen again.

On the other hand though, if talks are seen stuck for the time being, fears of a no-deal Brexit at the end of December will intensify and the Pound could see further losses instead.

Meanwhile, the Canadian Dollar could be influenced by oil as well as major Canadian ecostats tomorrow.

Oil prices could strengthen if markets are happy with the OPEC+ meeting of oil producers, and if investors remain optimistic about a global recovery from the coronavirus pandemic next year.

Not only that, but tomorrow’s Canadian growth rate results from Q3 2020 could influence the Pound to Canadian Dollar exchange rate if they surprise as well.
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