It’s likely to be a volatile week for the Canadian dollar and therefore GBP/CAD exchange rates as members of the Organisation of Petroleum Exporting Countries (OPEC) are set to meet this Wednesday to discuss the cap on oil supply globally. I believe there are three different potential outcomes of the meeting.
Firstly, if members come to an agreement and a cap is put into place, I expect the price of oil per barrel to rise. Many economists are predicting a major rise to $60 per barrel. Past history tells us if the price of oil increases the Canadian dollar will strengthen and therefore GBP/CAD could fall.
Secondly, many of the countries have pledged to cut production and if an agreement is made countries could still pull out later down the line. If this is the case I expect a short term spike in the market for Canadian sellers but as soon as countries hint they will remove the cap the gains could then be reversed.
Thirdly, the members of OPEC do not come to an agreement and therefore, the price of oil could fall. Again, past history tells us if the prices of oil falls the Canadian dollar tends to lose value. Therefore I expect the pound to make gains against the Canadian dollar.
Other economic data releases to look out for this week is annualised GDP numbers Wednesday at 1.30pm. The annualised figure is set to show a dramatic improvement from -1.6% to 3.4%, which could lead to a potential spike for the Canadian dollar throughout the afternoon trading period.
If you are buying or selling Canadian dollars within the next 6 months the OPEC meeting this week could have a major impact on the exchange rate you receive. I would recommend emailing your account manager or calling the trading floor on 0044 1494 725 353 prior to the meeting on Wednesday to discuss the options available to you.
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