Bias: Bearish-to-range-bound: CAD/GBP sits below the 90-day average and in the lower half of the 3-month range.
Key drivers:
- Rate gap: BoE’s policy rate remains higher than BoC’s, keeping GBP more resilient to policy shifts than the loonie, especially as the BoC signals a cautious stance on inflation.
- Risk/commodities: Oil prices hold above the 3-month average, lending modest support to CAD via Canada’s oil link, even though global risk appetite has cooled.
- One macro factor: UK GDP growth is projected to slow in 2026.
Range: CAD/GBP is likely to drift toward the lower end of its 3-month range, with a gentle bias to test the bottom and a chance of a near-term bounce if oil maintains support.
What could change it:
- Upside risk: further oil-price gains lift CAD and tilt the pair higher toward the range’s middle.
- Downside risk: stronger UK data or a hawkish BoE tilt strengthens GBP, pushing CAD/GBP lower.