Canadian Job Market Win Keeps Pound-Canadian Dollar Rate On Back Foot into Weekend

The Pound-to-Canadian Dollar rate was left flailing on Friday as the Loonie celebrated a better-than-expected July jobs report with gains over other major currencies, while all remained on the back foot against the U.S. Dollar. 

The Pound-to-Canadian Dollar rate edged lower Wednesday as the Loonie caught up with the rest of the major currency class following a run of underperformances, which could mean the recent rally in GBP/CAD ended with July. 

The Pound-to-Canadian Dollar rate closed its best week since March Friday and may have further to climb but increasingly the risk is that the rally is undermined, leading Sterling to hand back a substantial part of its recent gain. 

The Canadian Dollar struggled Friday even after official estimates revealed the May rebound in the economy was larger than economists expected, as risk appetite appeared to ebb and a preliminary estimate from Statistics Canada warned of only a limited further rebound in June. 

The Pound-to-Canadian Dollar rate was closing in on four-month highs Friday after a solid outperformance by Sterling in a week where the Loonie has lagged others alongside its larger North American counterpart, although the outlook depends largely on whether Canada's currency gets its mojo back. 

Foreign exchange analysts at Canadian lender CIBC say the Canadian Dollar's poor run of late can extend, citing a stalling in the global economic recovery and end to the recent rally in commodity prices.

The Pound-to-Canadian Dollar exchange rate was breaking higher from a narrow and weeks-long trading range Tuesday in moves that could lift it back to levels not seen since early May over the coming days and weeks.

The Pound-to-Canadian Dollar rate edged higher amid a turn for the worse in market sentiment last week and it could attempt an upside breakout from its recent stiflingly narrow range in the days ahead, although the risk is of more range trading.