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Canadian Dollar Rises as Oil Prices Increase

Published: 25 Jan at 5 PM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, Australian Dollar, New Zealand Dollar, Canadian Dollar, Australia, New Zealand, USA, Canada, Germany,

Pound (GBP)

The Pound was subdued today despite news that Prime Minister Boris Johnson would be ‘looking at the potential of relaxing some lockdown measures’ in February.

Despite these comments buoying confidence in the UK economy opening – albeit it in cautious stages – next month, GBP investors have remained overall jittery.

Matt Hancock, the UK’s Health Secretary, also said over the weekend that the nation was a long way off easing the nationwide lockdown.

As a result, Sterling has remained generally subdued against many of its peers as Covid-19 infections are still high and hospitals continue to be overrun by patients struggling with the virus.

Euro (EUR)

The Euro fell today following the release of January’s German Business Climate and Expectations data.

With the business climate figure falling unexpectedly to 90.1 and expectations shrinking to 91.1, EUR investors have remained cautious about the Eurozone’s economy.

Carsten Brzeski, Global Head of Macro at ING Bank, commented on the data:

‘Today’s IFO index shows the full impact of the stricter lockdown measures put in place in mid-December, signaling a very weak start to the new year for the German economy.

US Dollar (USD)

The US Dollar has continued to benefit from investors seeking out safe-haven currencies as the global economic situation looks increasingly uncertain.

America’s new President, Joe Biden, has hinted at further Covid-19 stimulus programmes for the world’s largest economy.

However, analysts at Reuters warned:

‘[I]nvestors are wary about towering valuations amid questions over the efficacy of the vaccines in curbing the pandemic and as U.S. lawmakers continue to debate a coronavirus aid package.’

Canadian Dollar (CAD)

The Canadian Dollar rose today as the commodity-linked ‘Loonie’ has benefited from rising oil prices.

Oil prices have risen because of reports that Iraq could reduce its production of oil. Libya also reported disruptions in its crude oil exports owing to complications over pay.

Warren Patterson, head of commodities strategy at ING, said:

‘If Iraq manages to reduce output to these levels, it would be the lowest output we have seen from them since 2015. However, given Iraq’s record of falling short with production cuts, there is no guarantee that they will meet this target.’

Australian Dollar (AUD)

The Australian Dollar rose today following Australia’s approval of the Pfizer Covid-19 vaccine.

As a result, demand for the AUD has risen with hope growing for the Australian economy as the vaccine programme offers a glimmer of hope for the nation’s economic recovery.

New Zealand Dollar

The New Zealand Dollar has continued to benefit from some improvement in risk sentiment today.

However, with Covid-19 cases rising around the world, ‘Kiwi’ investors are becoming more cautious.

As of Monday, 25th January 2021, the Pound Sterling currency rates mentioned within this news item were as follows:

GBP EUR exchange rate was 1.1263, GBP USD exchange rate was 1.3676, GBP AUD exchange rate was 1.773, GBP NZD exchange rate was 1.8997, and GBP CAD exchange rate was 1.7424.
Dominic Lee About Author: (474 Posts)With over ten years experience as an economist – including four years spent as a chief economist with a major currency broker – Dominic has acquired a wealth of knowledge which he uses to forecast market movements. Dominic now works as an independent business advisor and writes for several financial publications.

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