GBP/CAD Exchange Rate Muted amidst Brexit Uncertainty
The Pound to Canadian Dollar (GBP/CAD) exchange rate is rangebound this morning as markets await the outcome of the latest round of Brexit talks.
At the time of writing the GBP/CAD exchange rate is trading at around CA$1.7226, virtually unchanged from this morning’s opening rate.
Pound (GBP) Faces Pressure Over Lack of Brexit Progress
The Pound (GBP) faces some likely headwinds at the end of this week as the latest round of Brexit negotiations are set to conclude on Friday.
This is the penultimate set of talks before a decisive summit in June, during which the UK government will make its decision on whether enough progress has been made to warrant continuing negotiations.
So far that seems highly unlikely, with the UK and EU remain in a deadlock over what a post-Brexit trade relationship should look like.
Following the previous round of talks, EU chief negotiator Michel Barnier warned that progress had so far been disappointing, while the UK reported only ‘Limited progress’ had been made.
June’s summit will also be the last chance for the two sides to agree upon whether to extend the Brexit transition period beyond the end of December.
So far the UK government has ruled out any kind of extension to the transition period, remaining committed to the December deadline in spite of the coronavirus crisis disrupting talks and threatening to put more pressure on the UK economy.
Unsurprisingly the uncertainty posed by a potential no-deal Brexit will not be welcomed by GBP investors, likely piling more pressure on Sterling through the second half of this week.
Uptick in Oil Prices to Support the Canadian Dollar (CAD)?
Meanwhile, the Canadian Dollar (CAD) looks to have found some support through the second half of the week as oil prices look set to appreciate.
This comes as the International Energy Agency (IEA) made a modest revision to its forecast for oil demand in 2020, with the IEA predicting a slight increase in overall demand as many countries start to ease their lockdown measures.
The IEA is now predicting that demand will fall by 8.6 million barrels a day in 2020, against a previous forecast for a 9.3 million drop.
This has seen WTI crude prices climb back above $26 a barrel this morning, with further gains likely to bolster the appeal of the oil-sensitive ‘Loonie’.
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