The Pound-Canadian Dollar rate could strengthen if Andrew Bailey reinforces BoE hike expectations, while softer Canadian producer prices may weigh on the Loonie. The Pound to Canadian Dollar (GBP/CAD) exchange rate was rangebound on Wednesday, following the publication of the UK's latest consumer price index.
At the time of writing, the GBP/CAD exchange rate was trading at CA$1.8809. Almost unchanged from the start of Wednesday’s session.
Latest — Exchange Rates:
Pound to Canadian Dollar (GBP/CAD): 1.881279 (+0.01%)
Euro to Canadian Dollar (EUR/CAD): 1.577669 (-0.10%)
Dollar to Canadian Dollar (USD/CAD): 1.40436 (-0.16%)
DAILY RECAP:
The Pound (GBP) traded with modest support on Wednesday as the UK's latest CPI figures printed above forecast.
According to data published by the Office for National Statistics (ONS), UK inflation accelerated from 3.1% to 3.5% in September, outpacing forecasts that it would only rise to 3.4%, while also reaching an 11-month high.
The rise in inflation was primarily linked to surging energy prices, although hotter-than-expected core inflation suggests price pressures are becoming more broad-based.
September data further reinforces bets the Bank of England (BoE) will kick-start a new hiking cycle at its next meeting in November.
Likely capping Sterling's upside potential was the UK's accompanying borrowing data, with a larger-than-expected increase in the public deficit last month, further limiting the fiscal headroom available to Chancellor John Healey in his upcoming budget.
The Canadian Dollar (CAD) edged higher on Wednesday as a fresh rally in global oil prices provided a welcome boost for the commodity-linked currency.
Brent crude climbed to a new five-month high this week amid concerns over a potential escalation of tensions in the Middle East.
While diplomatic efforts to contain the conflict triggered a pullback in prices late on Tuesday, Brent subsequently moved higher again on Wednesday as supply concerns persisted.
Near-Term GBP/CAD Forecast: BoE Bailey Remarks to Lift Sterling? Turning to the second half of the week, the next catalyst of movement for the Pound to Canadian Dollar (CAD/USD) exchange rate will be scheduled remarks from BoE Governor Andrew Bailey.
If Bailey concedes that rising inflationary pressures will push the BoE to tighten monetary policy in the coming months, Sterling is likely to firm.
Meanwhile, Canada's latest producer price index could weigh on the 'Loonie' if a slowdown in factory gate prices last month, dampens Bank of Canada (BoC) rate hike bets.
Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.
Měnový pár GBP/CAD byl minulý týden volatilní a zůstal téměř beze změny na úrovni 1,8869 CA$. Tento týden jej mohou ovlivnit britská data o zaměstnanosti a inflaci i kanadský index spotřebitelských cen (CPI).
The Pound-Canadian Dollar rate could remain volatile as UK jobs and inflation data shape BoE expectations, while Canadian CPI may influence the Loonie. Trade in the Pound to Canadian Dollar (GBP/CAD) exchange rate was volatile last week, amid mixed domestic catalysts and fluctuating commodity prices.
At the time of writing, the GBP/CAD exchange rate traded at CA$1.8869. Almost unchanged from the start of last week’s session.
Latest — Exchange Rates:
Pound to Canadian Dollar (GBP/CAD): 1.884791 (+0.05%)
Euro to Canadian Dollar (EUR/CAD): 1.58918 (-0.15%)
Dollar to Canadian Dollar (USD/CAD): 1.41394 (-0.39%)
DAILY RECAP:
The Pound (GBP) traded unevenly during the first half of last week, with a mix of positive economic news and cautious comments from the Bank of England shaping market sentiment.
An upgrade to the UK’s growth outlook from the International Monetary Fund (IMF) provided some encouragement, with its forecast for 2026 raised from 1% to 1.3%.
However, the Pound faced headwinds after Bank of England (BoE) Chief Economist Huw Pill challenged expectations of an aggressive tightening cycle.
While acknowledging the need to contain inflation, Pill questioned whether the central bank would deliver four interest rate increases over the next year.
Momentum shifted in the Pound’s favour during the latter half of the week, when UK GDP figures unexpectedly showed the economy expanding in August.
The stronger-than-forecast reading reinforced expectations of a November rate hike from the BoE, while offering Chancellor John Healey some welcome relief ahead of his forthcoming Budget.
The Canadian dollar (CAD) remained closely tied to movements in global oil prices this week.
This saw the commodity-linked currency stage a notable mid-week rebound as crude prices climbed amid renewed concerns over disruptions to global energy supplies.
However, a subsequent pullback in oil prices, coupled with some cautious remarks from Bank of Canada (BoC) Governor Tiff Macklem, led the ‘Loonie’ to relinquish the bulk of these gains by the end of the session.
Near-Term GBP/CAD Forecast: Stream of UK Data to Drive Sterling A packed calendar of UK economic data could bring renewed volatility to the Pound to Canadian Dollar (GBP/CAD) exchange rate this week.
Investors will be paying particular attention to the latest employment and inflation figures, both of which will help shape expectations ahead of the BoE’s November interest rate decision.
In the meantime, Canada’s own consumer price index could lift the ‘Loonie’ if a rise in inflation is seen as placing more pressure on the Bank of Canada to tighten monetary policy.
Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.
GBP/CAD se po slabých kanadských údajích o zaměstnanosti zotavil k 1,8900; Kanada v září ztratila 68 300 pracovních míst a míra nezaměstnanosti vzrostla na 6,5 %.
The Pound to Canadian Dollar (GBP/CAD) exchange rate edged higher to 1.8877 on Monday after Canada's disappointing employment report weakened the Loonie and reduced expectations of another Bank of Canada rate increase.
UK GDP and comments from Canadian central bank officials will provide the next tests.
Latest-Exchange Rates:
Pound to Canadian Dollar (GBP/CAD): 1.887824 (+0.07%)
Euro to Canadian Dollar (EUR/CAD): 1.594977 (-0.12%)
Dollar to Canadian Dollar (USD/CAD): 1.42644 (+0.06%)
WEEKLY RECAP:
GBP/CAD recovered towards 1.89 on Friday after Canada's unexpectedly weak employment report prompted investors to scale back bets on further Bank of Canada tightening.
Canadian employers shed 68,300 jobs in September, following a 41,700 decline in August, while unemployment increased to 6.5%.
The figures pushed the Canadian Dollar to an 18-month low against its US counterpart and reduced expectations for an October BoC rate increase.
Scotiabank economist Derek Holt questioned the unusually large decline in public-sector employment, particularly in education and healthcare, cautioning against placing too much weight on one survey.
ING strategist Francesco Pesole had already suggested that an October rate increase looked premature.
Pound Sterling has its own difficulties.
UK government borrowing costs remain elevated, with investors increasingly concerned about the credibility of the government's fiscal plans ahead of the 28 October Budget.
MUFG expects the Bank of England to raise rates in November, although confidence in UK public finances remains an important consideration for Sterling.
Oil prices could offer the Canadian Dollar some protection against the latest employment disappointment, with crude markets still highly sensitive to Middle East developments.
Near-Term GBP/CAD Forecast: UK GDP and Bank of Canada Signals in Focus Canadian markets are closed on Monday for Thanksgiving.
Bank of Canada Governor Tiff Macklem speaks on Wednesday, followed by Senior Deputy Governor Carolyn Rogers on Thursday. Investors will be watching for any indication that the jobs report has altered the central bank's policy outlook.
For Pound Sterling, Thursday's UK GDP figures are the main release. Economists expect a 0.1% monthly contraction in August, following July's 0.4% expansion.
Manufacturing and industrial production figures are also due.
Canada publishes building permits on Wednesday, manufacturing and wholesale sales on Thursday, and housing starts on Friday.
If UK growth holds up and BoC officials acknowledge weaker employment conditions, GBP/CAD could challenge 1.9000.
Disappointing UK GDP or a firmer Canadian policy message would leave the pair vulnerable towards 1.8750.
Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.
Pound-Canadian Dollar could rebound if BoE policymakers turn more hawkish, although firmer oil prices may continue to support the Loonie.
The Pound to Canadian Dollar (GBP/CAD) exchange rate drifted lower on Wednesday as a fresh rise in oil prices underpinned the 'Loonie'.
Latest — Exchange Rates:
Pound to Canadian Dollar (GBP/CAD): 1.882128 (-0.11%)
Euro to Canadian Dollar (EUR/CAD): 1.594999 (-0.13%)
Dollar to Canadian Dollar (USD/CAD): 1.42265 (-0.23%)
DAILY RECAP:
The Canadian Dollar (CAD) edged higher on Wednesday, with the commodity-linked currency drawing support from a fresh uptick in global oil prices.
Brent crude climbed back above $101 a barrel as concerns over potential storm-linked supply disruptions in the Gulf of Mexico and escalating tensions between Saudi Arabia and Yemen’s Iran-backed Houthis outweighed signs of improving Middle Eastern crude exports.
The rise in oil prices provided a welcome boost for the ‘Loonie’, which remains closely correlated with movements in the energy market given Canada’s position as a major oil producer and exporter.
CAD had already recovered some ground on Tuesday after data showed Canada’s trade surplus widened considerably more than expected in August, reaching C$4.2bn as exports to the US surged ahead of the latest round of tariffs.
The Pound (GBP) traded without a clear directional bias on Wednesday, with a relatively quiet UK economic calendar limiting liquidity in the currency.
Rising UK gilt yields did apply some modest pressure to Sterling, however, with the rise in borrowing costs raising fresh doubts about the fiscal headroom available to Chancellor John Healey in his upcoming Autumn Budget.
However, Sterling's losses were simultaneously tempered by growing expectations that the Bank of England (BoE) will deliver an interest rate hike in November.
Near-Term GBP/CAD Forecast: Hawkish BoE Commentary to Strengthen Sterling?
Turning to the second half of the week, the Pound to Canadian Dollar (CAD/USD) exchange rate will likely be influenced by scheduled speeches from several BoE policymakers.
These speakers include two of the three members of the Monetary Policy Committee - Megan Greene and Huw Pill - who voted for an immediate rate hike last month, as well as Governor Andrew Bailey.
If Bailey joins his more hawkish colleagues in talking about the need for tighter monetary policy, it's likely to reinforce expectations for a November rate hike and lift Sterling.
In the meantime, movement in the 'Loonie' is likely to remain firmly linked to oil price dynamics, with CAD likely to remain underpinned so long as oil prices continue to climb.
Exchange Rates UK Research
Our currency coverage draws on live market data, official economic releases and published bank research.
GBP/CAD minulý týden vystoupal na pětitýdenní maximum a byl o více než 0,7 % výše. Podporu mu daly sázky na zvýšení úrokových sazeb BoE a silnější růst britské ekonomiky.
The Pound-Canadian Dollar could stay supported if UK services remain resilient, while weaker Canadian jobs data may weigh on the Loonie. The Pound Canadian Dollar (GBP/CAD) exchange rate saw big swings last week, with Sterling hitting a five-week high against the ‘Loonie’ amid UK interest rate hike bets and stronger GDP growth.
At the time of writing, GBP/CAD was trading at CA$1.8878, up over 0.7% on the week.
Latest — Exchange Rates:
Pound to Canadian Dollar (GBP/CAD): 1.887449 (+0.04%)
Euro to Canadian Dollar (EUR/CAD): 1.605032 (+0.09%)
Dollar to Canadian Dollar (USD/CAD): 1.42531 (+0.02%)
DAILY RECAP:
The Pound (GBP) made a positive start to the week, as remarks from Bank of England (BoE) Deputy Governor Dave Ramsden fuelled expectations that the central bank could raise interest rates in November.
A lack of fresh UK data saw Sterling lose momentum on Tuesday, but the currency regained ground midweek after revised figures revealed stronger-than-expected UK economic growth. GDP expanded by 0.5% in the second quarter, reinforcing market bets on a November rate increase.
However, the Pound’s upward momentum faltered on Thursday after the UK’s final manufacturing PMI was revised slightly lower. Despite the downgrade, the index continued to signal an improvement in manufacturing activity.
Sterling ended the week on a firmer footing, drawing support from Burnham’s remarks on strengthening the UK’s ties with Europe and the possibility of rejoining the EU.
The Canadian Dollar (CAD) edged lower at the start of the week as concerns about the ongoing US-Canada trade war offset support from a surge in global oil prices.
The commodity-linked currency then recovered on Tuesday, shrugging off softer oil prices as a rebound in Canadian GDP in August helped lift sentiment.
However, CAD struggled to build on these gains midweek as oil prices remained below $100 per barrel.
The Canadian Dollar rebounded sharply on Thursday after touching multi-week lows, with a fresh jump in oil prices boosting demand for the crude-linked currency.
Nevertheless, CAD ended the week on the defensive as Brent crude fell back below $100 per barrel.
Near-Term GBP/CAD Forecast: Rising Canadian Unemployment to Dent the ‘Loonie’? Looking ahead, the UK’s final services PMI on Monday is the only British data release on the calendar this week. If the figures confirm a slowdown in the crucial sector, the Pound could come under pressure.
Canada’s services PMI is also out on Monday, although its impact may be limited. Markets expect activity to have improved slightly but remained in contraction territory last month.
Friday’s Canadian jobs data is the key release for the week. A forecast rise in unemployment in September could weigh on CAD.
Meanwhile, oil price dynamics will likely continue to drive the currency. Further turbulence could trigger big swings in the Canadian Dollar.
Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.
GBP/CAD se odrazil od 55denního EMA a trh sleduje, zda kanadská pracovní data a ropa nad 86 USD potvrdí průlom nad 1,9042. Slabší data z Kanady by mohla pár vrátit k této rezistenci.
TL;DR: GBP/CAD looks ready to resume its uptrend after rebounding from the 55-day EMA, but a sustained breakout depends on two separate forces — Friday’s volatile Canadian jobs report and whether oil’s renewed strength above $86 continues to support the Canadian Dollar.
Why the Correction May Already Be Over After nearly a month of consolidation, GBP/CAD is showing signs that its broader uptrend may be ready to resume. The pair has rebounded convincingly after holding the 55-day EMA, suggesting the pullback from 1.9042 was a healthy correction rather than a change in trend. A retest of the July high now looks likely. Whether GBP/CAD can convert that into a sustained breakout, however, will depend on two very different forces: this week’s Canadian labor market data and the direction of oil prices.
Force One: The Scheduled Risk — A Volatile Canadian Jobs Report The first is the easier of the two to assess. Canada’s July employment report is expected to show job growth of 15k, with the unemployment rate holding steady at 6.5%. Those numbers would broadly indicate a labor market that remains stable despite slowing economic momentum. Yet recent history suggests caution — Canada’s employment data have repeatedly produced large surprises this year, swinging from an unexpected -18k decline in April to an 88k surge in May, before moderating to 18k in June. That volatility means another downside surprise cannot be dismissed.
A softer employment report would likely weaken the Canadian Dollar by reinforcing the Bank of Canada’s patient policy stance. The BoC has kept rates unchanged for five consecutive meetings since its October 2025 rate cut, repeatedly signaling it’s prepared to look through temporary inflation shocks as long as underlying price pressures remain contained. Weak labor market data would support that approach by reducing the urgency for any policy tightening — and could provide the catalyst for GBP/CAD to revisit 1.9042.
Force Two: The Unscheduled Risk — Oil’s Renewed Grip on the Canadian Dollar The bigger challenge lies beyond Friday’s data. The main reason GBP/CAD lost momentum after reaching 1.9042 in early July was the sharp reversal in oil prices. Brent crude had bottomed near $70 before surging above $100 following the collapse of the 60-day US-Iran ceasefire, restoring strong support for the commodity-linked Canadian Dollar and forcing GBP/CAD into a month-long consolidation.
The pair’s rebound from 1.8709 has coincided with Brent’s retreat from above $100 to around $80, which eased some of that support for the Canadian Dollar. But oil has since recovered above $86 as geopolitical tensions remain unresolved, once again acting as a headwind for Sterling. The current advance in GBP/CAD therefore looks less constrained by Canadian domestic fundamentals than by the renewed resilience of crude prices.
Why the Geopolitical Backdrop Hasn’t Actually Changed The geopolitical backdrop has changed little despite alternating headlines from Washington and Tehran. President Donald Trump has shifted from projecting confidence in imminent negotiations to warning that Iran faces a “last chance,” while Tehran continues to insist there are no immediate plans for direct talks with the United States, limiting engagement to Oman’s mediation over the Strait of Hormuz. The fundamental disagreement over the future of the waterway remains unresolved, leaving markets reluctant to remove the geopolitical premium embedded in oil prices.
That distinction is important. A weak Canadian employment report may be enough to propel GBP/CAD back toward 1.9042, but it’s unlikely to be sufficient for a sustained breakout if Brent remains elevated. For Sterling bulls, Friday’s jobs report could provide the trigger — but whether the rally extends beyond the July high will depend far more on whether oil prices retreat again, which in turn requires credible progress toward renewed US-Iran negotiations rather than another round of conflicting political statements.
ActionForex’s Technical View on GBP/CAD The technical outlook reflects that balance between constructive momentum and lingering macro risks. GBP/CAD remains firmly within the rising channel from 1.8017, and this week’s rebound from the 55-day EMA, now around 1.8716, strengthens the case that the correction ended at 1.8709. A break above 1.9042 would open the way toward the 61.8% projection of 1.8299 to 1.9042 from 1.8709, at 1.9168, in the near term.
However, rejection by 1.9042 will set up another leg to extend the corrective pattern, with risk of a deeper fall through 1.8709. In that case, strong support should be seen from the rising channel floor, now at 1.8617, to bring a rebound.
Key Takeaways GBP/CAD’s rebound from the 55-day EMA suggests the pullback from 1.9042 was a correction, not a trend change, with a retest of the July high likely. Canada’s July jobs report (consensus: 15k job growth, 6.5% unemployment) carries elevated surprise risk given three large misses already this year. A weak jobs print could push GBP/CAD back toward 1.9042, but a sustained breakout depends more on oil, which has recovered above $86 after briefly easing from $100. The US-Iran standoff over the Strait of Hormuz remains unresolved despite shifting rhetoric, keeping a geopolitical premium embedded in oil and a headwind on Sterling. 1.9042 is the key resistance; a break opens 1.9168, while rejection risks a deeper pullback toward 1.8709, with the rising channel floor at 1.8617 as the next support.
ActionForex
ActionForex.com was set up back in 2004 with the aim to provide insightful analysis to forex traders, serving the trading community for two decades. We started providing only a daily and a mid-day report, now known as Action Insights. Gradually, we added a lot more in-house contents to the site. Technical Outlook section was expanded to cover more pairs. In addition to that, Top Movers, Heat Map, Pivot Point Charts and Pivot Meters, Action Bias and Volatility Charts, are tools used by traders from all over the world.
GBP/CAD se drží nad 1,8800 a trh čeká na rozhodnutí BoE, které může pár posunout zpět k 1,8900. Minulý týden skončil asi 0,4 % níže kvůli obavám o britské finance a dražší ropě.
GBP/CAD could recover towards 1.8900 this week, although the Bank of England decision, UK fiscal concerns and volatile oil prices will determine whether the rebound can hold. The Pound to Canadian Dollar exchange rate (GBP/CAD) opened the new week near CA$1.8820, having recovered from last week’s three-week low around CA$1.8740.
GBP/CAD nevertheless ended the previous week approximately 0.4% lower, as UK fiscal concerns weighed on Pound Sterling while rising oil prices supported the commodity-linked Canadian Dollar.
Latest — Exchange Rates:
Pound to Canadian Dollar (GBP/CAD): 1.8819 (+0.20%)
Euro to Canadian Dollar (EUR/CAD): 1.608296 (+0.35%)
Dollar to Canadian Dollar (USD/CAD): 1.4096 (+0.01%)
Image: GBP/CAD Technical Outlook Ahead of the Bank of England Decision Near-term momentum has improved after GBP/CAD moved back above the 1.8800 area.
The 15-minute chart shows the pair holding above its short-term moving average and session VWAP, while the relative strength index remains positive without signalling an extreme overbought position.
Initial resistance is located around 1.8830. A sustained break above this level could open the way towards 1.8870 and then the psychologically important 1.8900 area.
On the downside, 1.8800 is the first support to watch. A break beneath 1.8780 would weaken the recovery and expose last week’s low near 1.8740.
Near-Term GBP/CAD Forecast: Bank of England Holds the Key Thursday’s Bank of England decision will provide the week’s main test for Sterling.
The Bank is widely expected to leave interest rates unchanged at 3.75%, meaning the vote split, updated forecasts and guidance on future tightening will be more important than the decision itself.
At the previous meeting, two Monetary Policy Committee members voted for an immediate increase to 4.00%.
Further concern about the inflationary impact of elevated energy prices could therefore reinforce expectations that the Bank may raise rates later this year.
A relatively hawkish decision, particularly one that keeps a September increase under consideration, would support a GBP/CAD move through 1.8830 and towards 1.8900.
However, Pound Sterling could retreat if the Bank emphasises weaker growth, softer headline inflation or the risk that higher energy costs will damage demand rather than create persistent domestic inflation.
UK political and fiscal developments will remain an additional risk.
The Pound struggled last week after Prime Minister Andy Burnham appointed John Healey as Chancellor and investors questioned how the government’s proposed tax reductions would be funded.
This political uncertainty overshadowed stronger-than-expected UK retail sales and business activity figures, preventing Sterling from making a sustained recovery.
Oil Prices and Canadian GDP Could Support the Loonie For the Canadian Dollar, oil prices are likely to remain at least as important as domestic data.
Crude prices surged last week following attacks on Saudi tankers and infrastructure around the Red Sea, but fell sharply on Monday as a pause in US-Iran attacks encouraged hopes of renewed diplomacy.
Shipping disruption through the Bab el-Mandeb Strait means the risk premium has not disappeared, leaving CAD sensitive to further geopolitical headlines.
A renewed rise in Brent crude would probably favour the Canadian Dollar and could push GBP/CAD back towards 1.8780.
Conversely, a continued oil-price correction would remove an important source of CAD support.
Friday’s Canadian GDP report will provide the main domestic event.
Statistics Canada will publish May’s GDP figures alongside an advance estimate for June, following April’s 0.5% expansion.
Stronger growth would reinforce the downside risk for GBP/CAD.
Nevertheless, the central forecast is for the pair to remain supported above 1.8780, with a hawkish Bank of England outcome potentially driving a recovery towards 1.8870–1.8900.
GBP/CAD v pondělí klesl, protože růst cen ropy po obnoveném napětí mezi USA a Íránem podpořil kanadský dolar. Ropa na začátku seance vzrostla asi o 4 %.
The Pound to Canadian Dollar (GBP/CAD) exchange rate slipped on Monday as renewed conflict between the US and Iran lifted oil prices and supported the commodity-linked Canadian Dollar.
At the time of writing, GBP/CAD was trading at CA$1.8931, down around 0.2% on the day.
Latest — Exchange Rates:
Pound to Canadian Dollar (GBP/CAD): 1.891014 (-0.36%)
Euro to Canadian Dollar (EUR/CAD): 1.611545 (-0.28%)
Dollar to Canadian Dollar (USD/CAD): 1.41364 (-0.15%)
DAILY RECAP:
The crude-linked Canadian Dollar (CAD) firmed on Monday as escalating tensions in the Middle East triggered a rise in global oil prices.
After a lull in the fighting on Friday, hostilities between the US and Iran resumed on Sunday following an Iranian strike on a container ship in the Strait of Hormuz. The US responded by attacking Iranian targets, with Tehran further retaliating by targeting US allies in neighbouring Gulf states.
Markets are growing increasingly concerned that the conflict could intensify further, limiting shipping in the region. As a result, oil prices rose around 4% at the open on Monday. Although crude trimmed some of these gains as the session went on, CAD remained supported.
Meanwhile, the Pound (GBP) was mixed on Monday as a lack of UK economic data left the currency rudderless.
Sterling was able to avoid steep losses against the rising Canadian Dollar thanks to ongoing political optimism in the UK, with GBP investors remaining confident that the political uncertainty that has dogged the Pound over the past year was coming to an end.
Near-Term GBP/CAD Forecast: BoE Comments to Impact the Pound? Looking forward, Tuesday’s session starts with a speech from Bank of England (BoE) Governor Andrew Bailey.
Bailey has stuck to a cautious tone in recent weeks, arguing that the bank ought to wait and see how inflation plays out before considering adjusting policy. However, with global energy prices rising amid renewed US-Iran tensions, the Pound could tick higher if the BoE chief strikes a more hawkish chord.
Meanwhile, oil price dynamics are likely to drive the ‘Loonie’. CAD could remain supported if crude continues to climb amid escalating tensions in the Middle East.
GBP/CAD tento týden vystoupal na desetileté maximum, protože libra těží z vyšších sazeb a Kanada čelí rostoucí nejistotě kolem USMCA. Trh nyní čeká na červnová data z kanadského trhu práce.
GBP/CAD climbed to its highest level in a decade this week, reflecting an increasingly powerful divergence between a Pound supported by fading domestic political risks and a Canadian Dollar facing mounting structural headwinds. Sterling continues to benefit from the unwinding of sizeable speculative short positions built ahead of Prime Minister Keir Starmer’s resignation, while Bank of England Governor Andrew Bailey has effectively ruled out near-term rate cuts. With Bank Rate holding at 3.75% versus the Bank of Canada’s 2.25%, the existing yield advantage remains firmly intact. More recently, however, the rally has found an additional and arguably more durable driver: rising uncertainty over Canada’s trade outlook.
The turning point came on July 1, when the Trump administration declined to extend the USMCA at its mandatory trilateral review. Although the agreement remains in force under an annual review mechanism for up to another decade, the decision marks a meaningful increase in long-term policy uncertainty rather than an immediate disruption to trade. Instead of securing another 16-year extension, businesses now face the prospect of recurring negotiations and periodic reviews. That uncertainty could weigh on investment and growth over coming years, reducing the likelihood that the Bank of Canada will need to tighten policy further.
The BoC has already downplayed the inflationary impact of higher energy prices, arguing there is limited evidence that rising oil costs are feeding into broader price pressures. Together, the trade outlook and the central bank’s cautious stance point to a policy bias that is becoming increasingly less supportive for the Canadian Dollar.
Market positioning reinforces that narrative. Speculative bearish bets against the Canadian Dollar have climbed to their highest level since December, while Canada’s two-year yield trades more than 140 basis points below its US counterpart, the widest gap since last May.
Attention now turns to June employment data from Canada due tomorrow, which could determine whether markets further strengthen expectations ahead of the Bank of Canada’s July 15 meeting. Consensus looks for employment to rise by around 10,000 after May’s outsized 88,000 gain, with the unemployment rate holding at 6.6%.
The risks appear asymmetric. A weaker-than-expected report would reinforce the existing bearish narrative by strengthening expectations that the BoC remains firmly on hold or even shifts toward easing eventually. By contrast, an in-line or even moderately stronger report may offer only temporary relief while the broader uncertainty surrounding USMCA continues to overshadow Canada’s medium-term outlook.
Technically, further rise is expected in GBP/CAD as long as 1.8875 support holds. Immediate focus is on medium term rising channel resistance (now at 1.9049). Decisive break there could prompt upside acceleration to 138.2% projection of 1.8017 to 1.8694 from 1.8299 at 1.9235. Break of 1.8875 will delay the bullish case, and bring consolidations first.
In the bigger picture, GBP/CAD is extending the whole up trend from 1.4069 (2022 low). Next medium term target is 61.8% projection of 1.6355 to 1.8912 from 1.8017 at 1.9597.
ActionForex
ActionForex.com was set up back in 2004 with the aim to provide insightful analysis to forex traders, serving the trading community for two decades. We started providing only a daily and a mid-day report, now known as Action Insights. Gradually, we added a lot more in-house contents to the site. Technical Outlook section was expanded to cover more pairs. In addition to that, Top Movers, Heat Map, Pivot Point Charts and Pivot Meters, Action Bias and Volatility Charts, are tools used by traders from all over the world.
