GBP/CAD continued the bearish stance in the morning, but the Loonie has lost moment in the last few hours and the pair is now showing no daily change, trading at 1.6985.
The quotation dropped to a daily low at 1.6952, as investors priced in a potential rate cut from the Bank of England (BoE), especially after a series of disappointing economic updates released by the UK’s Office for National Statistics (ONS).
Elsewhere, the Loonie rose on increasing oil prices, which were driven by news that two large production facilities in Libya started to shut down because of a military blockade.
Both West Texas Intermediate (WTI) and Brent brands increased more than 0.50% in the morning, to $58.82 and $65.48, respectively.
Two of the largest oil-producing bases in Libya began to cease its operations yesterday after forces close to renegade commander Khalifa Haftar closed a pipeline. Libya’s National Oil Corporation (NOC) said that the situation might potentially affect national output. The closure came after a blockade of important oil ports and could cause the country to take its oil output offline.
However, oil prices have lost momentum after analysts and investors realized that supply disruptions in Libya won’t have a significant impact on global markets and might be short-lived. As a result, the Canadian dollar has lost its initial gain against the British pound and now trades in sideways.
Stephen Brennock of oil broker PVM explained:
“The oil market remains well supplied with ample stocks and a healthy spare capacity cushion. In other words, the bullish price impact may prove to be fleeting.”
Elsewhere, Amrita Sen, chief oil analyst at Energy Aspects, commented:
“We expect the current scale of outages to be fairly short-lived as there is limited upside for Haftar to slow the country’s oil revenues to a trickle. The current closures are clearly a power play aimed at boosting Haftar’s leverage amid international efforts to broker peace in the country.”
Libya has been struggling with economic problems and civil war since the fall of Muammar Gaddafi nine years ago. Foreign powers agreed to organize a summit on Libya, which was held yesterday in Berlin.