Recent market updates indicate that the GBP to CAD exchange rate is currently at 1.8553, which is slightly above its three-month average. The GBP has shown resilience after experiencing losses earlier, bolstered by strong support from political endorsements and decent economic data, notably a better-than-expected final services PMI. However, analysts express caution regarding the pound's recovery, projecting limited movement as the market approaches the weekend without significant UK data releases.
On the other hand, the Canadian dollar remains influenced by its closely watched relationship with oil prices. Currently, oil has traded at 68.80 USD, standing 3.2% above its three-month average and reflecting a volatile trading range. As Canada is a prominent oil exporter, fluctuations in oil prices have a substantial impact on the CAD, particularly given weaker prices that have recently limited further gains.
The CAD's movement has also been supported by its correlation with the US dollar, though trade challenges and tariffs loom on the horizon. Recent trade tensions, including a reciprocal tariff imposition from the US, add further complexities to the CAD outlook. Economists suggest that if Canada’s services sector experienced contraction in June, the CAD might struggle for upward momentum.
Looking ahead, the GBP may remain susceptible to domestic economic performance and any shifts in monetary policy from the Bank of England. Conversely, the CAD's direction could hinge on oil market trends and developments in US-Canada trade relations. As both currencies are currently in a stable range, traders will need to closely monitor economic indicators, particularly concerning service sector health and oil price movements, which could influence the GBP to CAD exchange rate significantly in the short term.