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GBPCAD – Value at 1.6500?
The loonie was on fire today boosted by 4% rally in crude that took the commodity above the $45/bbl level. There is speculation that OPEC may finally arrive at some workable quota, but given the rise in the USD and the need for revenue amongst the Gulf states chances are slim that any accord will hold and that is likely to push crude towards $40/bbl once again.
Meanwhile, cable continues to show relative strength and tomorrow’s UK labor data should show that the employment in UK remains robust. Therefore the GBP/CAD pair which saw a sharp selloff today could represent a near term bargain especially now that it is approaching strong support at 1.6500 level that is likely to bring out the bargain hunters. If UK data continues to impress, GBPCAD could pop right back towards 1.7000 over the near term horizon.