- Dip in Inventories amidst Steady Demand puts Oil above $50 a Barrel – Oil exporting nations rejoice.
- More Public Figures take to the Stage to Support Remain – Investor George Soros plays up economic downturn in event of a Brexit.
- UK PM David Cameron Gives Pleading Speech outside Number 10 – Cameron urges voters to think about the economy and national security.
- UK EU REFERENDUM TOMORROW, Results due Friday Morning – The fateful day finally arrives, Friday’s results will have significant impact.
The Pound’s meteoric rallying against the Canadian Dollar was stemmed somewhat as oil prices rebounded to just above $50 a barrel.
The Pound has seen much support lately as public sentiment was perceived to swing in favour of the UK remaining within the European Union. Suspended campaigns on the back of last week’s tragic murder of pro-EU Labour MP Jo Cox allowed a brewing ‘Remain’ movement to gather momentum and recent endorsements by public figures have only reinforced the camp.
The massive swell in ‘Remain’ support saw Sterling rally substantially against the majors from Friday onwards and the currency appears able to hold its gains.
Oil rebounded from around the $48 mark to just over $50 a barrel as falling inventories drove up the price.
Currently the Pound Canadian Dollar exchange rate sits at 1.8751, with GBP/CAD gains levelling off somewhat.
Pound (GBP) Holds on to Gains on the Back of Surging Pro-EU Outlook
The Pound looks to have balanced itself out somewhat after a phoenix-like rise that began last Friday.
Falling a small amount across the board, the currency is attempting to reach a form of equilibrium after some of the largest single-day gains for some time. On Monday the EU Referendum polls were still conflicting with an ORB poll placing ‘Remain’ at a seven-point lead and a YouGov poll showing ‘Leave’ were 2% in front.
Prime Minister David Cameron gave a pleading speech outside Number 10 yesterday. Cameron urged voters to look towards the impact a Brexit would have on the economy and national security. He stated it would be easier to fight terrorism and climate change if the UK stayed in the union and any reforms would be better made with our involvement.
‘We achieve more if we’re in these organisations fighting for British interests rather than standing outside, ear pressed to the glass.’
Michael Gove of the ‘Leave’ campaign compared economists and finance experts warnings of a Brexit to the Third Reich-funded German scientist’s smearing of Albert Einstein. Gove gave this comparison as a reason for not heeding the call of a multitude of monetary experts warning that a Brexit would have dire consequences for the UK’s economy.
In other news, memorial services are being held around the world on what would have been Jo Cox’s 42nd birthday. Cox’s brutal murder last week spelled the beginning of a wave of pro-EU sentiment as the public rallied against the politically motivated assassination.
Falling Inventories see Oil back over $50 a Barrel, Canadian Dollar (CAD) Prospers
Today’s retail figures did very little to positively or negatively affect the Canadian Dollar. The data printed above forecast at 0.9%, way up from last month’s -0.8%. Ultimately the report had little effect.
The rise in oil prices has boded well for the ‘Loonie’ as the Canadian currency has made fairly decent gains against the Euro, Yen and US Dollar.
The US Federal Reserve’s continued dovish outlook in regard to raising rates has seen investors move to the more lucrative currencies. The wild card that is the UK’s Brexit vote is still a constant source of uncertainty and will continue to have an impact long after the results are announced. However, rising commodity prices, especially copper, have helped insulate the ‘Loonie’s’ value against the newly triumphant Pound.
Oil prices have rebounded from their low in February as the over-supply has started to wane somewhat, in turn driving up prices as demand remains. Oil is Canada’s most lucrative export so naturally this afforded some upwards pressure on CAD. This would be a welcome respite as oil prices have been struggling significantly for well over 12 months. OPECs decision to keep production uncapped earlier in the month did little to help matters.
Future for the Pound lies in UK’s EU Referendum Results
There is little of importance ecostat-wise for the rest of the week.
Dominating the psyche of all speculators, investors, bankers, and analysts is the wait for tomorrow’s EU referendum. Exit polls on the day are almost guaranteed to have an immediate effect with the actual result being released Friday morning at 7am.
Experts are more-or-less in agreement now that a Brexit could have catastrophic implications for the economy and the job market. Some state another recession is likely while other believe the Pound could fall as much as and over 20% in the event.
Either way sentiment will continue to be the prime impactor for the Pound and other currencies now that the effects have started radiating outwards.
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