Pound to Canadian Dollar Weekly Forecast: Oil Prices May Keep CAD Supported

The Pound to Canadian Dollar (GBP/CAD) exchange rate retreated to around CA$1.8718, sliding roughly 0.5% over the previous week as a severe sell-off in UK government bonds weighed on Sterling. The UK 10-year gilt yield climbed above 5.25%, hitting a 19-year high, while 30-year yields reached levels last seen in 1998, stoking fears over rising borrowing costs and limited fiscal headroom ahead of the UK's upcoming Autumn Budget. Meanwhile, the Canadian Dollar found support mid-week after the Bank of Canada held interest rates steady but issued hawkish guidance warning of upside inflation risks, though subsequent weak domestic jobs data tempered some gains. Looking ahead, GBP/CAD is forecast to face continued downward pressure if upcoming UK GDP data indicates an economic slowdown and diminishes Bank of England rate hike expectations. Furthermore, elevated oil prices driven by geopolitical uncertainty in the Middle East could provide ongoing support for the commodity-linked Loonie.