Sterling Gains on CAD Despite Oil Talks

GBP EUR Lower After ECB Monetary Policy Minutes

Canada’s biggest export oil is the main driver of currency movements for the Canadian Dollar and recent meetings between oil producing nations helped the CAD gain. Russia and Saudi Arabia have agreed cooperate with one another to curtail the overproduction of oil. The price of Oil has struggled to rise above the $50 a barrel mark as there is so much supply currently available. Saudi Arabia is able to produce oil at one of the lowest costs so they have still been profitable despite the low value. However the process is unsustainable for some producing nations so controlling supply could see the price jump up.

What will this mean for CAD?

If the price of oil was to increase then you would directly see that relate to the strength of the Canadian Dollar. If oil producing nations do come up with a deal this will inevitably cause the price of oil to improve quickly. The Canadian Dollar would then begin to gain against Sterling in a short period of time.

Potential Rate

In my opinion oil is likely to eventually start to improve in the future and there will be informal talks on the 26th and 27th September. The value of a barrel may well jump and this could take the GBP/CAD rate down into the 1.60’s.

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