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Pound Canadian Dollar Exchange Rate News: GBP/CAD Mixed as Brexit Issues Resume

November 24, 2021 - Written by John Cameron

Pound (GBP) Faces Headwinds due to On-Going Northern Ireland Negotiations

The Pound to Canadian Dollar (GBP/CAD) exchange rate is fluctuating today as GBP remains under pressure from the Northern Ireland negotiations.

Anne-Marie Trevelyan, the international trade secretary, hinted that the UK Government is easing their approach towards the Northern Ireland protocol yesterday, declaring that she doesn’t ‘…think anyone's calling Article 16 before Christmas…’

However, the future relationship between the UK and Europe remains unclear.

Medicine trade is at the forefront of UK-EU negotiations as the initial grace period for regulation and border checks expire at the close of this year. Although the UK has extended this grace period, if a decision cannot be reached by the end of January, there are concerns of a UK-EU trade war.

Maroš Šefčovič, Vice President of the European Commission said:

‘I think that if there was the clear political will from the U.K. side these ... problems could be solved.

But looking at how far we progressed over the last four weeks, the level of detail our U.K. partners want to discuss, I know that we will probably not be able to resolve everything before the end of the year.’

If a deal cannot be struck and Article 16 is triggered, GBP investors worry a trade war between the UK and the EU may occur. A trade war would negatively impact the Pound as it would disrupt the UK’s economic recovery.

Canadian Dollar (CAD) Mixed amid Stalling Oil Prices

At the same time, the Canadian Dollar (CAD) is fluctuating against the Pound since the start of today’s session.

The commodity-linked CAD is in narrowrange as a result of shifting oil prices. However, the ‘Loonie’ is staying relatively high despite US President Joe Biden’s decision to tap US oil reserve earlier in the week.

Dan McTeague, President of Canadians for Affordable Energy, said:

‘Reserves are meant for extraordinary times, and these are not extraordinary times. We didn’t have a hurricane. There’s not a war that’s inhibiting supply.

‘If you want to cure high prices, you’ve got to allow high prices to curb demand.

‘You can’t turn around and suddenly decide, ‘Hey, I found a way to get a short fix here to drop energy prices by flooding the market with a simple reserve of product,’ which, you know, if nothing else dropped prices increase demand. It’s very counterintuitive. This is a supply problem, not a demand problem.’

The ‘Loonie’ is showing little change and is likely to remain mixed throughout the week due to the volatile oil market.

GBP/CAD Exchange Rate Forecast: Pound Subdued by Brexit Anxieties

Looking ahead, the ambiguity surrounding Brexit negotiations could see the Pound to Canadian Dollar exchange rate (GBP/CAD) struggle, whilst CAD may continue to fluctuate amid oil price uncertainty.

The Pound (GBP) is likely to remain directionless due to an absence of data. Though, Bank of England’s (BoE) Governor, Andrew Bailey, and policymaker, Jonathan Haskell, are expected to deliver speeches on Thursday. If hawkish remarks are made, it may help to boost BoE rate hike bets and lift Sterling.

CAD is likely to be influenced primarily by fluctuating oil prices this week due to a lack of notable data scheduled for release.

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