How the attack in Saudi Arabia has affected the Canadian Dollar
The pound to Canadian rate has experienced increased volatility in the last 24 hours owing to the concerns raised over the outlook on Oil prices. In particular, geopolitical concerns relating to attack on a Saudi Arabian oil field. Oil prices have risen as much as 20% as this week commences, fuelling demand for the Canadian dollar and other petrol currencies including the Norwegian Kroner.
Oil is a key export for Canada, and this rise in prices has contributed to the improvement in the value of the currency. Also on the pairing, we have seen the trip to Europe by Prime Minister Boris Johnson attracting attention. Boris Johnson has found trouble in Luxembourg with the Prime Minister of Luxembourg criticising the UK PM for a lack of detail on plans for Brexit.
Sterling had risen on expectations that a deal could be struck but the false expectations have contributed to the pound losing some value. GBP/CAD levels are still higher than at any point since the beginning of July, providing Canadian dollar buyers with some much welcome improvements after GBP/CAD levels spent some occasions in August below 1.60 on the interbank exchange rate.
Looking ahead, the pound to Canadian exchange rate looks like it will need to face up the continuing uncertainty of Brexit, with no immediate resolution apparent. The concerns in Saudi Arabia relate to the global economy and with global growth having slowed, and investors conscious of central banks cutting interest rates on such fears, there could be more concerns ahead for the pairing.
Bank of England interest rate decision due this week
For GBP/CAD exchange rates, this week will also contain the latest Bank of England interest rate decision on Thursday, which will present the market with fresh news relating to the UK economy. Previously, the UK’s central bank had been concerned over a possible recession because of Brexit, will this view have shifted now?
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