- GBPCAD falls on Brexit fears and oil price increase
- Exchange rates down 2.5 cents since the weekend
- Further falls likely with Brexit uncertainty the main driver
Sterling to Canadian Dollar exchange rates have taken a hit since the weekend. Theresa May’s announcement regarding the timing of Article 50 has resulted in Sterling weakness and fresh uncertainty for the UK. Much of the weakness is likely due to a lack of Brexit plans and thus a drop off in investment.
Theresa May remains vague about her plans for the UK which has raised questions for those working and operating within the financial sector.
GBPCAD is now trending near its lows since the Brexit vote.
Oil prices increase on OPEC agreements
The uptake in oil prices has recently been fuelled by the recent OPEC meeting with many of its member agreeing on a production limit. Whilst this has positive implications for CAD investors remain sceptical given the inability to arrange a production freeze in the past.
Saudi Arabia are unlikely to stick to any agreement if rival Iran doesn’t, and Russia’s last agreement with OPEC back in 2001 never actually materialised.
Whilst oil prices have rebounded in the last week I am not expecting this rebound to last. GBPCAD will likely continue to fall due to Brexit uncertainty as we approach 2017.
Economic data on Friday could cause CAD volatility
Friday’s unemployment rate and Ivey PMI could cause CAD weakness, with the recent fall in oil prices business conditions may have taken a hit. However if you do need to buy CAD in the very near future I would do so sooner rather than later as the general devaluation of the Pound as a result of Brexit will likely be the main cause of further downfalls.
