Author, Mike Smith
In this article I take a look at the Pound to Canadian Dollar forecast for the remainder of 2025 and into early 2026. I’ll give you my exchange rate predictions and talk about the key factors driving the GBP/CAD rate.
How has the Pound been performing against the Canadian Dollar?
The Pound has lost ground against the Canadian Dollar over the past month.
The GBP/CAD exchange rate has dropped from the $1.90s to $1.84 as investors worry about the effect Rachel Reeves’ Budget may have on the value of Sterling.
The Bank of England’s decision to cut interest rates has also held back the Pound.
Reeves’ confirmation last week that she will not be raising income tax has given bond market participants further cause for concern.
Elsewhere, the situation with the UK’s economy has suppressed any support for the Pound.
Economists have noted that weak (bordering on zero) domestic economic growth and above-target levels of inflation point to ‘stagflation’ in the UK.
What has been driving Canadian Dollar strength?
Events across the border in the USA have helped the Canadian economy’s prospects.
President Donald Trump’s back-tracking on tariffs has triggered higher growth forecasts for the USA.
Meanwhile, White House watchers expect an announcement on a new Federal Reserve Chair soon.
It’s almost certain that the next Fed Chair, who will be hand-picked by Trump, will be a fan of interest rate cuts.
This will provide a boost to the Canadian economy and the Canadian Dollar.
Futures markets suggest that the chances of an interest rate cut in America next month have dropped from 70% to 50%.
The health of the Canadian economy depends heavily on demand from its major trading partner, the USA.
A cut from the Fed would therefore provide the Canadian Dollar with further forward momentum.
Canada’s interest rate has been cut down to 2.25% in recent months.
Further near-term interest rate cuts from the Bank of Canada appear unlikely, giving the Canadian Dollar further opportunity to improve.
Elsewhere, global oil prices remain steady but subdued.
The Canadian Economy’s number one export remains Crude Oil and many analysts forecast that the price of a barrel of Crude is due a bounce.
This would cause further positive movement for the Canadian currency.
Pound to Canadian Dollar Forecast for Late 2025 / Early 2026
I forecast the GBP/CAD exchange rate will drop to $1.80 in coming weeks.
Any slip-up from Rachel Reeves in her Budget Statement on 26 November could push the Pound to Canadian Dollar rate down toward $1.80 sooner rather than later.
Keep an eye on the Bank of England in the coming weeks — any hints that interest rates need to be cut more quickly than markets expect would have the same downward effect.
Current forecasts suggest there’s roughly a 65% chance UK interest rates drop to around 3.75% before the end of 2025.
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What is a good GBP to CAD rate?
Anyone looking to exchange Pounds into Canadian Dollars, or vice versa, is left with the problem of when to exchange their money – now or in the future?
If you are a buyer of Canadian Dollars, you want a high GBP-CAD rate.
If you are a buyer of Pounds, you want a low GBP-CAD rate.
The easiest way to tell if the GBP to CAD rate is good or bad is to compare it to historical exchange rates.
In my view, I wouldn’t go back much further than 10 years.
Once you start looking at even long-dated charts, you’re digging into data that is likely to be no longer relevant. Every decade has its specific events.
Over the last 10 years, the average GBP/CAD rate isn’t much different at $1.74 (source: Bank of England).
If the GBP to CAD rate is above its long-term average of $1.74, you can consider it a good rate for buyers of Canadian Dollars.
Conversely, if the GBP to CAD rate is below $1.74, it can be considered a bad rate.
It’s a simple yardstick to use.
The further the exchange rate is away from its average, the more extreme the move.
The GBP/CAD exchange rate can stray a long way from the average.
Over the past 10 years, the highest GBP/CAD rate was $2.0847 on 11 December 2015 – just before Brexit.
The lowest GBP/CAD rate in the past 10 years was $1.4707 on 28 September 2022 – the Pound fell considerably following the Liz Truss mini-budget fiasco.
There’s about a 30% swing from the high to the low!
Even over a regular week, you see swings of 2-4% quite frequently.
Bear in mind even small moves make a big financial difference to someone exchanging money.
That’s why keeping a close eye on the GBP to CAD rate is important.
GBP to CAD weekly forecasts
Forecasting exchange rates over a weekly period is a lot less complicated than longer timeframes.
Over a week, there is a smaller number of factors that can influence the GBP to CAD exchange rate.
Most of the important economic news is scheduled in advance. It allows people to see if anything critical is on the horizon.
One easy way anyone can keep tabs on upcoming news is to look at an economic calendar. I quite like the calendar by DailyFX because it’s got a simple, clear layout.
As currency brokers, we follow the economic calendar closely as it gives us a heads-up on potential risks.
In addition to economic news, you can also look at the GBP to CAD exchange rate for near-term price patterns.
Using price patterns to predict exchange rates is called technical analysis.
While there are many forms of technical analysis, I find the GBP/CAD technical analysis overview provided by investing.com useful.
Note – the page defaults to hourly analysis, but you can change the period to weekly or monthly to get a different perspective.
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Need some guidance on exchange rates?
Getting a good GBP to CAD exchange rate can make a big financial difference to you.
As I mentioned, you only have to take a quick look at a GBP to CAD chart to see plenty of big swings up and down.
It’s worth being proactive about.
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As part of our service, we will assist you with your payment set-up, guide you on current rates and market trends, and keep you informed from start to finish.
We can discuss with you and agree on the right time to exchange your money by understanding your requirements and taking advantage of favourable rate movements.
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