The GBP/CAD currency pair settled below recent high of 1.8520, its strongest level since February 26th, as the Sterling drew support from market expectations that the Bank of England will likely deliver two interest rate hikes in 2026.
Those expectations are being shaped by persistent inflation concerns and the impact of rising energy prices.
At the same time, Bank of England Governor Andrew Bailey has recently warned that such expectations may be overstated, signaling a degree of caution around the current pricing of the policy path.
Meanwhile, new data released this week showed Canada’s Merchandise Trade Balance deficit had widened to a six-month high of CAD 5.74 billion in February.
The deterioration in the trade balance came as a result of an 8.4% surge in imports to a record CAD 72.05 billion, which more than offset a 6.4% increase in exports.
The minor Forex pair lost 0.24% for the week.
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