Oil prices continue to drive CAD value but will a Brexit breakthrough push GBP/CAD higher?

Oil prices continue to drive CAD value but will a Brexit breakthrough push GBP/CAD higher?

The Canadian Dollar has seen some strong gains against a raft of major currency pairs recently, after being boosted by some very impressive gains for oil prices, which often tie into the Loonie’s value.

Oil prices boost CAD

So far this year, both Brent Crude and WTI oil prices have risen by nearly 25% which has boosted CAD’s value owing to the fact that oil is one of Canada’s main exports. The gains have prompted US President Donald Trump to comment, and he has urged OPEC (the Organisation of Petroleum Exporting Countries) to ‘take it easy’ with its production cuts as the world cannot take a price hike. These comments resulted in a slight drop for the Canadian Dollar’s value, but generally speaking the currency has been boosted recently.

A clearer path for Brexit helps the Pound

Sterling has also been strengthening owing to a clearer path for the Brexit, which is now just over 1 month away. UK Prime Minister, Theresa May once again yesterday reiterated her stance that the UK is due to leave on the expected date of the 29th of March and Sterling has jumped owing to the clearer plans.

Key Brexit votes in March

The next key date to look out for is likely to be Tuesday the 12th of March when another ‘meaningful vote’ in the House of Commons on her Brexit deal will take place. If the Government lose the vote a motion will be tabled and voted on to approve or reject a ‘no deal’ Brexit and this would take place on the 13th. If a no deal is also rejected, then on the 14th there will be a vote on whether there will be an extension or not and this could impact GBP exchange rates.

Economic data is playing second fiddle to politics out of the UK at the moment, and with Brexit now just a month away there could be big movement for GBP exchange rates over the next few weeks.

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