- Pound’s rebound from 1.6540 was capped at 1.6650.
- Sterling remains weak against the commodity-linked CAD.
- GBP/CAD appreciated towards 1.6950 – Scotiabank.
GBP’s attempted recovery from multi-year lows at 1.6540 seen today has capped a further 110 pips at 1.6650 before pulling back to the 1.6620 area.
Higher oil prices are supporting the CAD
The pound has been unable to post a significant recovery as the loonie remains quite strong with oil prices rebounding from weekly lows.
The lack of progress in the talks between Russia and Ukraine and the warning from the International Energy Agency (EIA) that the fall in world demand caused by the increase in prices will not compensate for the closure of Russian supply have renewed concerns on oil shortages, which has boosted the commodity-linked CAD against most of its majors.
Earlier today, the pound has been showing weakness, weighed down by Thursday’s dovish statement from the Bank of England. The bank raised interest rates as widely expected, although the tone of its monetary policy statement was seen as skewed to the dovish side, leading to broad-based sterling weakness.
GBP/CAD is expected to appreciate towards 1.6950 – Scotiabank
From a technical perspective, Scotiabank FX analysts expect the pair to rise towards 1.6950 in the coming months: “We remain of the view that GBP/CAD looks relatively ‘cheap’ here, near the bottom of the sideways range that has persisted since 2020, and we look for GBP gains to 1.6950 to trigger additional strength back to 1.75″.
Source: Fx Street
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