The Pound (GBP) has fallen nearly two cents against the Canadian Dollar (CAD) today with investors proving increasingly hawkish as a resurgent US Dollar (USD) helped boost market confidence.
Pound Canadian Dollar (GBP CAD) Drops as Investors Encouraged by a Strong US Dollar (USD)
The Pound Canadian Dollar exchange rate tumbled today as Sterling was unable to profit from the US Dollar’s recovery.
Market sentiment towards the ‘Greenback’ markedly improved following the news that Hillary Clinton had been cleared by the FBI of any wrongdoing when using a private email server whilst she was US Secretary of State.
This caused Mrs Clinton’s campaign to recover some of the ground lost against her Republican rival Donald Trump in last week’s polls, helping to alleviate investor fears of a Trump presidency and its potential impact on the US economy.
This, in turn, has helped strengthen the commodity-correlated Canadian Dollar as renewed confidence in the US Dollar caused traders to go ‘risk-on’.
Canadian Dollar Rises as OPEC Promises Production Cut is Coming
The oil-based Canadian Dollar has also been bolstered by rising Crude prices as they rose more than 1% earlier today.
Oil was up at $46.20 a barrel as the Organization of the Petroleum Exporting Countries (OPEC) reaffirmed its commitment to curbing global crude production.
However, prices remain $7 below last month’s high as investors are still sceptical that any meaningful deal will be made, with Iraq recently stating that it should be excluded from production cuts and doubts were cast on whether Russia will even agree to it.
GBP CAD Forecast: Movement likely to Dictated by US Election
The Pound to Canadian Dollar exchange may see a slight increase tomorrow if British industrial and manufacturing production improve as expected, but it is unlikely to cause any major movement in the currency pairing. Investors will instead be waiting for the results of the US Election to be known and the dust to settle.
Should Trump managed to overcome the odds and win in tomorrow’s election, then it is highly likely that the Canadian Dollar will lose out in the ensuing market chaos as investors flee risk sensitive currencies like the ‘Loonie’ in favour of ‘safe haven’ currencies like the Japanese Yen (JPY).
Current Interbank Exchange Rates
At the time of writing the GBP/CAD exchange rate was trending around 1.66 and the CAD/GBP exchange rate was trending around 0.60.
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