February 17, 2022 - Written by John Cameron
STORY LINK Pound Canadian Dollar Exchange Rate News: GBP/CAD Climbs Amid Cooling Oil Prices
GBP/CAD Trading Higher as US-Iran Negotiations Cool Oil Prices
The Pound Canadian Dollar (GBP/CAD) exchange rate is edging higher today as oil prices cool following positive discussions between the US and Iran.
At the time of writing, the GBP/CAD exchange rate is trading at approximately CA$1.7293, up roughly by 0.2% from today’s opening levels.
Canadian Dollar (CAD) Slips as Oil Prices Ease
The commodity-linked Canadian Dollar (CAD) is trading down against the Pound (GBP) this morning as oil prices cool.
Earlier this week, crude oil rallied to an 8 year high, however the US-Iran negotiations regarding oil stockpiles has since suppressed prices.
Rystad Energy AS Senior Vice President, Claudio Galimberti, said:
‘Positive developments in the U.S.-Iran nuclear negotiations are helping to calm oil prices.
‘Although not a done deal yet, prices are sliding on news of progress and broad consensus in the talks as it could ultimately see up to 900,000 barrels a day of crude added to the market by December this year.’
Currently, WTI crude oil is $92.46 per barrel, down by 1.31%.
Meanwhile, many world leaders remain dubious of Russia’s actions.
Although Russia has announced a withdrawal of troops from the Ukrainian border, the number of military personnel appear to be growing on the ground.
Yesterday, Canadian Defense Minister, Anita Anand, said:
‘The escalation of Russian troops at the Ukrainian border, including in Belarus, is increasingly significant.
‘We look forward to seeing evidence of the withdrawal of troops on Russia’s part. But we need to prepare for any eventuality with that significant escalation of Russian troops that we have seen over the last week.’
This is escalating fears that Russia intends on invading Ukraine and may cause an outbreak of war in Europe.
Thus, the developments in Russia are capping CAD’s losses as any disruption in Russian oil exports could buoy crude prices in the near future.
Pound (GBP) Rises despite Brexit Concerns
The Pound (GBP) is climbing against the Canadian Dollar (CAD) in spite of renewed Brexit concerns.
Since the 2016 referendum, the UK and EU have been reconstructing their relationship, however many UK businesses are requesting the support of the government after claiming that the new EU trade deal is not supporting sales growth.
Recently, 1000 businesses were surveyed by The British Chambers of Commerce (BCC).
The results found that only 8% agreed that the Trade and Co-operation Agreement (TCA) was ‘enabling their business to grow or increase sales’.
Meanwhile, 54% disagreed and stated that they are experiencing increased paperwork, costs and delays.
Similarly, only 12% of UK exporters believed that the TCA was supporting them, whilst 71% disagreed.
William Bain, head of trade policy at the BCC, said:
‘This is the latest BCC research to clearly show there are issues with the EU trade deal that need to be improved.
‘Nearly all of the businesses in this research have fewer than 250 employees and these smaller firms are feeling most of the pain of the new burdens in the TCA.
‘Many of these companies have neither the time, staff nor money to deal with the additional paperwork and rising costs involved with EU trade, nor can they afford to set up a new base in Europe or pay for intermediaries to represent them.’
GBP/CAD Exchange Rate Forecast: Will UK Retail Sales Boost GBP?
Tomorrow, the UK’s retail sales for January is forecast to increase from December’s 3.7% contraction to 1% growth; this may bolster the GBP/CAD exchange rate.
Similarly, the Canadian retail sales for December may hinder the ‘Loonie’s demand as the figures are expected to print at -2.1%, down from November’s 0.7%.
In addition, the Russia-Ukraine tensions will continue to influence the Pound Canadian Dollar exchange rate.
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TAGS: Pound Canadian Dollar Forecasts