The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate ticked lower by around -0.16% on Wednesday morning.
Although the forthcoming general election is weighing on investor confidence amid political uncertainty, the Pound is generally holding steady on Wednesday morning. This can be attributed to speculation that the Bank of England (BoE) minutes, due for publication later on Wednesday morning, will contain hawkish tones.
The Canadian Dollar, meanwhile, was trending higher thanks to oil prices holding above $56 a barrel. Slightly improved risk-appetite amid a softer US Dollar also aided the ‘Loonie’ (CAD) uptrend. An absence of domestic data could see the Canadian Dollar track US Dollar losses later in the European session, however.
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate is currently trending in the region of 1.8290.
Yesterday…
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate was trending within a tight range on Tuesday morning.
With a complete absence of domestic data to provoke volatility, the Pound edged lower versus the majority of its most traded currency rivals. The depreciation is as a result of trader reluctance to invest heavily in the British asset ahead of the general election.
The Canadian Dollar, meanwhile, softened against most of its major peers on Tuesday morning. The declination can be attributed to slightly lower oil prices. However, the downtrend has been slowed somewhat thanks to the currency tracking US Dollar gains.
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate is currently trending in the region of 1.8213.
Pound Sterling (GBP) Exchange Rate Softens on General Election Speculation
The British general election is fast approaching and this has weighed heavily on demand for the British asset. Although general elections will always have an impact on currency, to a certain extent, the forthcoming election has had a particularly detrimental effect on investor confidence. This is because many fear that there won’t be a clear majority, with several opinion polls showing differing results. This could lead to a coalition of minority parties, which could see a massive change to policy.
Researcher Kathleen Brooks, said; ‘We’ve seen volatility pick up and that’s because of the election uncertainty. We don’t know whether or not we’ll be under a Labour government that could be bad for the deficit, or under a Tory government that could take us out of Europe. Will we even have a government at all? There’s still a big chance of a hung parliament.’
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate dropped to a low of 1.8195 today.
Canadian Dollar (CAD) Exchange Rate Ticks Lower on Oil Prices
As a commodity-correlated currency, the ‘Loonie’ (CAD) is sensitive to oil prices. The recent crude price declination is as a result of oversupply in the US, although many feel that prices will resume bullishness.
‘If the demand and non-OPEC supply responses to lower prices are similar to what was experienced in the 1980s, the very low level of spare capacity carries a risk of a price spike in the not too distant future,’ said analysts at PIRA Energy.
The ‘Loonie’ (CAD) avoided a larger declination, however, as it tracks US Dollar gains. The ‘Greenback’ (USD) advanced in response to safe-haven demand.
Pound Sterling to Canadian Dollar (GBP/CAD) Exchange Rate Forecast to Fluctuate
With Canadian Wholesale Sales Data due for publication later on Tuesday, the Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate has the potential to fluctuate. Wednesday could see heightened GBP/CAD volatility with minutes from the most recent Bank of England (BoE) policy meeting due for publication. In addition, the Canadian budget will also be presented.
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate reached a high of 1.8264 today.
