CAD/GBP Outlook:
Slightly positive, but likely to move sideways, as CAD is just above its recent average without a clear driver.
Key drivers:
• Rate gap: The Bank of Canada is cautious with its policy, while the Bank of England maintains a dovish stance, nudging the CAD ahead of GBP.
• Risk/commodities: Despite strong global oil prices, which have hit near 90-day highs, tensions with the U.S. have led to CAD pullbacks.
• One macro factor: The upcoming UK GDP figures could create volatility for the GBP, particularly if results differ from expectations.
Range:
Expect CAD/GBP to hold steady within its recent range, showing limited movement between the upper and lower boundaries.
What could change it:
• Upside risk: A significant rise in oil prices could strengthen the CAD further.
• Downside risk: Increased geopolitical tensions or poor UK data could weigh on the GBP.