The Pound Canadian Dollar (GBP CAD) exchange rate continued its recent string of losses today as Sterling plummeted ahead of UK Prime Minister Theresa May’s ‘Brexit’ speech.
Pound Canadian Dollar (GBP CAD) Pressured by Speculation over PM’s Speech
The Pound dropped sharply at the start of trading this morning as Sterling sentiment soured as observers expect Theresa May’s speech on Tuesday to outline her plans for a ‘hard Brexit’.
Investors predict that main focus of the PM’s speech will be on regaining control of EU immigration even at the expensive of continued access to the single market, something that is likely to dismay traders who fear that the UK economy will suffer following the loss of free access to the European market.
The speech is also still likely to leave a great deal of uncertainty over how Britain will leave the EU as it is not expected to fully detail the government’s plans for ‘Brexit’ negotiations. The full plans are expected to be published closer to March, when May plans to invoke Article 50 of the Lisbon Treaty and begin the formal ‘Brexit’ process.
Weakening of Oil Prices Weigh on Canadian Dollar
The Canadian Dollar’s gains were trimmed this morning by a fall in oil prices over the weekend as doubts grew over whether major oil producers will actually cut production in line with the OPEC agreement made at the end of November.
Markets are concerned that a history of non-compliance from OPEC members and a rise in Iraqi oil exports in January will led to little notable impact on the global surplus.
Crude prices are also being pressured by predictions that US output (which is not part of the OPEC agreement) will begin to steadily rise in 2017, potentially countering any cuts made by other countries.
Pound Canadian Dollar Forecast: ‘Brexit’ Concerns Likely to Overshadow Rise in UK Inflation Tomorrow
Continued ‘Brexit’ anxiety is likely to prevent GBP CAD from rising on Tuesday, despite the release of the UK’s latest Consumer Price Index, which is expected to show that the inflation rate rose from 1.2% to 1.4% in December.
Meanwhile, the Canadian Dollar is also likely to largely unmoved by domestic data as the Bank of Canada is expected to vote to hold interest rates as 0.50% at its latest policy meeting on Wednesday afternoon.
Current Interbank Exchange Rates
At the time of writing the GBP CAD exchange rate was trending around 1.58 and the CAD GBP exchange rate was trending around 0.63.
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