The Canadian dollar is seeing heightened volatility this week as the impact of Hurricane Harvey is also seen on the Canadian dollar as well as US dollar. The price of oil has fallen after Hurricane Harvey hit the state of Texas and a number of oil refineries have been forced to close.
Considering this was the biggest hurricane that has hit the state for fifty years and the sheer size of the Texas economy means that repercussions are going to be felt elsewhere. It has been reported that 20% of the US oil refining capacities have been shut down this week. The Canadian dollar is impacted directly as a result of changes in the price of oil considering its large oil exporting capacity hence why the additional volatility this week and additional weakness for the Canadian dollar.
GBP CAD has rallied almost 1% on today’s trading with rates for this pair sitting at 1.63 which has presented those clients looking to buy Canadian dollars with a small improvement in the exchange rates available. The Brexit negotiations which have recommenced this week will take centre stage and will continue to be the single largest driver for sterling exchange rates.
Any signal of a future trade deal between Britain and the EU could see a quick turnaround for the pound and potential considerable strength. We are not there yet judging by this week’s talks between Brexit secretary David Davis and EU negotiator Michel Barnier where it appears that negotiations have hit something of a stalemate. The issue over the divorce settlement continues to keep pressure on the pound.
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