GBP/EUR: Pound Edging Higher Ahead Of BoE Policy Announcement

The Canadian dollar weakened versus the US dollar on Wednesday. The US dollar Canadian dollar exchange rate broke above the 1.30 mark during the US session on Wednesday and continued pushing higher to reach a peak of 1.3044. This is the highest that the pair has traded at since 31st December.

The dollar rose in late trade on Wednesday as investors’ concerns over escalating tensions between US and Iran eased following President Trump’s press conference. Following the attack by Iran on US military bases in Iraq, the White House confirmed that there were no causalities and that damage had been negligible. Trump said that “Iran appears to be standing down” whilst commenting that it is “a good thing” for all parties involved.

US economic data was also supportive of the greenback. The ADP private payroll report showed that private payrolls grew by an impressive 202,000 in December, beating analysts’ forecasts of 160,000 in another sign of a healthy labour market. The ADP report is closely correlated to the non-farm payroll. The NFP is the most closely watched macro data release of the month. A strong ADP reports bodes well for Friday’s NFP release.

Today investors will continue to monitor the situation in the Middle East. Investors will also switch their attention towards Friday’s non-farm payroll jobs report.

Ebbing Middle Eastern Tension & High Inventories Drag Oil Lower

Falling crude oil prices weighed on the value of the commodity sensitive Canadian dollar in the previous session. West Texas Intermediate tumbled 4.4% on ebbing Middle Eastern tensions, to close Wednesday’s session at $59.94. After spiking to a 9-month high of $65.65 on reports of Iran attacking US military base in Iraq, crude oil then made a sharp U-turn later in the US session after President Trump’s press conference.

Falling crude oil inventories also dragged on the price of oil. Inventories unexpectedly rose by 1.2 million barrels from the previous week. Given the oil is Canada’s largest export, the Canadian dollar is closely correlated to the price of crude oil.

Investors will continue monitoring oil prices. Investors could also glance towards the release of Canadian housing starts and building permits for further clues over the health of the Canadian economy. is a news site only and not a currency trading platform. is a site operated by TransferWise Inc. (“We”, “Us”), a Delaware Corporation. We do not guarantee that the website will operate in an uninterrupted or error-free manner or is free of viruses or other harmful components. The content on our site is provided for general information only and is not intended as an exhaustive treatment of its subject. We expressly disclaim any contractual or fiduciary relationship with you on the basis of the content of our site, any you may not rely thereon for any purpose. You should consult with qualified professionals or specialists before taking, or refraining from, any action on the basis of the content on our site. Although we make reasonable efforts to update the information on our site, we make no representations, warranties or guarantees, whether express or implied, that the content on our site is accurate, complete or up to date, and DISCLAIM ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. Some of the content posted on this site has been commissioned by Us, but is the work of independent contractors. These contractors are not employees, workers, agents or partners of TransferWise and they do not hold themselves out as one. The information and content posted by these independent contractors have not been verified or approved by Us. The views expressed by these independent contractors on do not represent our views.