Sterling has made gains against the Canadian dollar this morning, as UK health experts announced yesterday morning that they expect daily deaths from Coronavirus to continue to rise this week, but that there could be a plateau in the numbers over the coming two to three weeks. The government’s chief scientific adviser, Patrick Vallance, stated, “You’d expect that (the plateau) to go on for two or three weeks but I can’t be absolutely sure on the time of that.”
This statement comes as Spain and Italy begin to relax some of their lockdown measures this week, whilst in the US, the global epicentre of the crisis, Donald Trump has controversially claimed that he has ‘total authority’ in deciding when lockdown in the US is lifted in order to get the economy back on track. The UK is expected to announce this week how lockdown measures could change in the future and it will be interesting to see if there is any effect on GBP exchange rates as a result.
Brent Crude Oil Prices Rise as OPEC Production Deal Is Struck
There was uncertainty surrounding the strength of CAD last week with concern that there could be an oversupply in oil reserves due to lack of demand during the crisis. Yesterday however, OPEC have agreed a deal that will dramatically cut global output by 10% and is the largest oil cut to ever be agreed. Before a deal had been agreed, oil prices fell to an 18-year low in March, but yesterday saw Brent crude prices rise by almost 4%. This is a real positive for the Canadian economy with Brent crude being their largest export and CAD rates could stabilise on the back of any further oil price rises.
Bank of Canada Interest Rate Decision This Week
Tomorrow could be set to be a volatile day for GBPCAD exchange rates with the Bank of Canada’s interest rate decision tomorrow afternoon. At the end of March, in line with many other central banks around the globe, the BoC made a significant rate cut to 0.25% in response to the Coronavirus crisis. There will be an accompanying statement from the bank and it will be interesting to hear their views on how last month’s rate cut has affected the economy and any future monetary policy decisions that may be made.
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