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Pound Canadian Dollar Exchange Rate News: GBP/CAD Mixed as UK PM Seeks to Ease Surging Energy Prices

April 7, 2022 - Written by John Cameron

GBP/CAD Mixed as UK PM Vows to Ease High Energy Prices

The Pound Canadian Dollar (GBP/CAD) exchange rate is trading in a narrow range this morning as UK Prime Minister, Boris Johnson outlined his new energy strategy.

At the time of writing, the GBP/CAD exchange rate is trading at approximately CA$1.6420, with minimum movement from today’s opening levels.

Pound (GBP) Muted after UK PM Promises to Rein-In Energy Prices

The Pound (GBP) is mixed against the Canadian Dollar (CAD) this morning after Boris Johnson revealed plans to ease surging energy prices.

The UK government unveiled its new energy strategy in a bid to reduce the impact of volatile energy prices through increased nuclear, wind, solar and hydrogen production.

Johnson has stated the strategies will make the UK more self-reliant and reduce its dependence on foreign resources.

Johnson commented:

‘We’re setting out bold plans to scale up and accelerate affordable, clean and secure energy made in Britain, for Britain, from new nuclear to offshore wind, in the decade ahead.

‘This will reduce our dependence on power sources exposed to volatile international prices we cannot control, so we can enjoy greater energy self-sufficiency with cheaper bills.’

However, members of the opposition are sceptical of the initiative, with Ed Miliband, Labour’s shadow climate change and net-zero secretary, claiming it will do ‘nothing for the millions of families now facing an energy bills crisis.’

The UK is midst a cost of living crisis following the global pandemic and the Russia-Ukraine war.

The Ukraine crisis continues to intensify, particularly as additional sanctions have been imposed on Russia after atrocities were reportedly committed by their troops whilst they occupied areas surrounding Kyiv.

This is unsettling GBP investors and limiting the Pound’s demand today.

Canadian Dollar (CAD) Dips Slightly as Global Oil Demand Questioned

The Canadian Dollar (CAD) is trading slightly lower against the Pound (GBP) this morning as the Chinese city, Shanghai, extends its lockdown.

China has enforced a ‘zero-Covid’ policy, with ‘…Shanghai's epidemic prevention and control […] at the most difficult and most critical stage’, according to Wu Qianyu, an official with the municipal health commission.

Whilst the world’s manufacturing superpower struggles with high levels of coronavirus, CAD investors fear global oil demand will diminish.

This is placing pressure on the commodity-linked ‘Loonie’.

Despite this, oil prices are remaining strong at present: Brent is trading at $101.34 per barrel, up 0.23%, and crude oil is trading at $96.40, up 0.17%.

GBP/CAD Exchange Rate Forecast: Russia-Ukraine War to Hold onto Spotlight

Russia’s invasion of Ukraine, and Western sanctions imposed against Moscow in response, is likely to remain the driving force of the Pound Canadian Dollar exchange rate.

Should negotiations remain downhearted, the risk-sensitive Sterling may relinquish some of its gains.

Meanwhile, the Ukraine crisis may keep oil prices high and, in turn, support CAD.

On the data front, the ‘Loonie’ may be influenced by employment figures scheduled for release tomorrow.

The unemployment rate for March is forecast to slip from 5.5% to 5.3%. Should this print true, it may boost the Canadian economic recovery and buoy CAD’s appeal.

On the other hand, the Canadian employment change is expected to show 80K jobs were added to the economy during March; this is significantly below February’s 336.6K.

Later today, the Pound may be impacted by a speech from Bank of England’s (BoE) policymaker, Huw Pill.

If Pill strikes a broadly dovish tone, it may deter GBP investors.

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