The Canadian dollar is considered a riskier, commodity-based currency. Canada’s primary export is oil and with the price war ongoing between the world’s biggest producers it is causing CAD to remain vulnerable. It seems inevitable that there will have to be some kind of reconciliation as their product is now worthless and it is now becoming apparent there are no longer enough storage facilities to house the excess oil.
Oil Prices and Lockdowns Affecting GBPCAD Rates
It is worrying to think where sterling maybe sitting against the Canadian dollar should oil prices still be in a normal price range as GBP is in a fragile situation. Lockdown exit strategies will no doubt have an impact on sterling value as this will give us an idea as to when the UK economy can kick back into gear.
Brexit Continues to Weigh on Sterling Value
Forgetting about Covid for a moment, Britain still has Brexit to contend with. There is huge investor concern surrounding negotiations as Boris has yet to confirm an extension past 2020. This means a no deal scenario still remains on the cards and could hold back the pound.
It maybe the case that Boris is using this no deal scenario which could potentially hurt both sides as ammunition to get better trade terms in a quicker fashion, a dangerous game considering the current state of affairs.
Johnson could be thinking I will beat corona both personally and for the Country then stroll into Brexit talks with a limited period of time, broker a deal and come out smelling of roses. It is important to remember how unforthcoming in talks the EU were previous to Boris Johnson’s tenure as PM. Theresa May had very little joy in getting anything over the line, could it be the case that Boris’s stance is a necessity? Even if it is a dangerous one.
It would be wise to keep a close eye on events as the unfold if you have a currency requirement involving the pound, there could be news today as Boris returns to his position. An extension would be the sensible option considering the circumstances and if an extension is announced we could see sterling strength.
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