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.
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.
Our currency coverage draws on live market data, official economic releases and published bank research.
