British pound at best levels vs Canadian dollar since 2010, near-term forecasts are bullish

The British pound sterling has hit the highest levels against the Canadian dollar since early 2010 today.

In late afternoon trade in London we see the GBP to CAD exchange rate trading 0.85 pct up on last night's close at 1.6981.

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The strong move higher confirms the British pound to be in a strong bull-run against the Canadian currency.

Shaun Osborne at TD Securities says he is forecasting GBP to CAD at 1.72 in the near-term:

"We have been and remain bullish GBP/CAD. We noted previously that the primary trend here is higher and that despite the sideways range trade in the GBP over the past few weeks, short-term trend momentum remained bullish and in alignment with the bullish trend studies over the longer-term timeframes.

"The push to new highs this morning (highest levels since early 2010) has been a question of when rather than if and we continue to target 1.72 near-term. We think the longer-term picture is technically bullish."

CAD spooked by Poloz

BoC Governor Poloz said that the bank’s views had not changed significantly since October but commented that substantial stimulus remains appropriate and that the BoC would prefer to see inflation higher than it is currently.

Canadian CPI data are released Friday and will provide near-term stimulus.

Also weighing on the CAD, AUD, NZD and ZAR (your commodity / high-beta currencies) is the issue of tapering; weaker gold, rising US long-term yields and a stronger USD—extended yesterday on the back of the Bullard comments, FOMC minutes and firmer than expected US data.  

Trends have moderated somewhat this morning but weak data overseas (China and Eurozone PMIs) did encourage a little more strength in the USD versus the likes of the AUD and EUR.