Canadian Dollar Advances to End the Year and Hopes to Benefit From GBP’s Brexit Uncertainty

Pound to Canadian Dollar Remains Steady in 1.7479 and 1.7595 Range

The Christmas period was kind to CAD. Despite the currency sinking after poor October GDP data, the losses were not sustained further than Boxing Day. The poor data was not unexpected, and the market was prepared. The Canadian Dollar received support from rising oil prices and benefitted from a broad USD weakness. Meanwhile, the UK looks to fall short in the trading market as a no-deal Brexit still worries investors. GBP investors will be looking to this week’s manufacturing data for a positive lift in the currency.

CAD Cashes in on Oil Price Surge and Falling USD

The Canadian Dollar has performed well over the past few days, West Texas Intermediate (WTI) jumped 3.3% since the 20th of December when it hit $60.10/barrel. Yesterday saw the price trade at $62.10 this morning. This rise in oil price is supporting CAD and its economy as oil is the largest commodity that Canada trades in. Meanwhile US crude oil inventories fell by 7.9 million barrels last week. CAD is benefitting from a weakness in the USD, but the US-China trade deal is likely to help the United States when the deal is signed. The Canadian Dollar will also be boosted by the trade deal as it trades heavily with the US.

GBP Looks Volatile in the Weeks to Come Following Brexit Uncertainties

Following the Conservative majority in the General Election, investors were certain that most of the Brexit fears would subside with Boris Johnson promising a swift follow-through of his Brexit plan going into 2020 which would see the UK out of the EU next year. But upon announcing a hard deadline for Brexit in December 2020, he has opened the door for a chance of a no-deal Brexit to occur. This has worried investors and left the GBP once more surrounded in uncertainty. As a result, the Pound’s strength has dropped and other currencies like the Canadian Dollar have begun to edge upon it.

Thursday will see the release of the UK’s December manufacturing PMI data. Investors will be hoping that the GBP can build on the previous month’s figures. A positive result would likely help the pound and offer it some support to try to suppress the Brexit uncertainty.

If you would like updates for GBP/CAD rates or have an upcoming currency transfer, please contact me directly using the form below.