GBP/CAD Forecast – CAD’s Value Boosted by Increase in Oil Prices

The CAD has seen it value increase against the Pound over the past week, gaining over two cents against its GBP counterpart.

One of the main factors behind this spike is likely to be the recent rise in oil prices, with the price per barrel rising above $75 once again. Crude oil is one of Canada’s main exports and therefore any increase in the value of this natural resource, can help boost the Canadian economy and ultimately the CAD’s value as a result.

Another reason we’ve seen the Pound’s value slide is the on-going uncertainty surrounding the UK’s economic position post Brexit. Negotiations seem to be at an impasse and UK Prime Minister Theresa May is struggling to implement her preferred Brexit strategy, due to a lack of confidence in it from both the EU and members of her own Conservative party.

In truth, it seems as though the PM is in untenable positon, with any outcome likely to be viewed as negative by one side or another. It is becoming clearer that she is angling towards a softer Brexit for the UK, which in essence could actually help boost investor confidence in the Pound in the longer-term. However, until this strategy is implemented and agreed upon by the powers that be, it is unlikely that investor confidence in Sterling will soar and as such the Pound is likely to remain handicapped over the coming weeks.

Despite the CAD’s recent spike, it has also found itself handicapped over recent months. This is due to concerns over a slowdown in global trade and an uncertainty as to whether President Trump will alter the NAFTA agreement to such an extent that it puts the Canadian economy on the back foot.

Canada’s economy relies heavily on global growth to prosper and like many of the other commodity-based currencies, has struggled to gain any sustained market support since Trump implemented recent trade tariffs. It seems as though these concerns are currently being offset by a complete lack of confidence in the UK economy and its current turmoil but any forward momentum in Brexit talks, could change the current market perception and the CAD could find itself under pressure once again.

For more information on the factors likely to impact GBPCAD exchange rates, feel free to get in touch using [email protected].

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