Pound to Canadian Dollar Week-Ahead Forecast: CAD Dollar Faces BoC Test

The Pound to Canadian Dollar (GBP/CAD) exchange rate traded near CA$1.8809, having found upside momentum following a sharp escalation in trade tensions between the United States and Canada. The dispute intensified after bilateral trade discussions collapsed, resulting in 50% tariffs on select Canadian imports and retaliatory measures from Ottawa. Adding to the headwinds for the Canadian Dollar, Brent crude oil retreated toward $88 per barrel amid diplomatic progress in the Middle East, although a second-quarter Canadian GDP rebound cushioned broader losses. Looking ahead, traders are focusing on the upcoming Bank of Canada interest rate decision. While policymakers are broadly expected to maintain interest rates unchanged, any dovish forward guidance signaling accommodative policy to offset trade disputes could trigger further Canadian Dollar depreciation. Meanwhile, the British Pound faces a relatively sparse domestic economic calendar, with August services PMI data and broader market risk sentiment likely to dictate Sterling direction.