The GBP to CAD exchange rate is currently range-bound.
Key drivers include:
- The Bank of England is expected to cut interest rates by 40 basis points in 2026 as inflation cools, contrasting with the Federal Reserve's cautious approach to rate cuts.
- The Canadian dollar is feeling pressure from a persistent manufacturing downturn, with recent PMI data indicating contraction, while February's job gains provide some support.
- Overall economic growth is projected to slow in both countries, which may influence currency performance going forward.
In the near term, the GBP to CAD pair is expected to remain within a stable range following its recent peaks. Upside risks include stronger employment data in Canada or unexpected economic growth signals. Downside risks may arise from worsening oil prices, as Canada is a major oil exporter, which could negatively impact the CAD’s value.