Pound to Canadian Dollar Rate Feeling Out New and Lower Trading Range

The Canadian Dollar fell to its lowest against the U.S. Dollar since July 2020 this week in another torrid period for risky assets but it could be in line for one of the most significant recoveries if and when the greenback tops out, according to updated BMO Capital Markets forecasts.

The Pound to Canadian Dollar rate has had a torrid year thus far but there are both technical and fundamental indications that a turnaround may be in the pipeline, if not already underway, although much still rests on forthcoming Federal Reserve (Fed) and Bank of England (BoE) policy decisions.

CAD fell in the wake of domestic inflation data showing prices rose less than expected in August, underscoring a view the Bank of Canada will be amongst the first major central banks to complete its hiking cycle.

Canada reported job losses of 39.7K in August, reinforcing economist expectations for recession and a slowdown in the pace the Bank of Canada hikes interest rates.

The Pound to Canadian Dollar exchange rate has shown signs of stabilising of late but may now be on the cusp of lurch toward all-time lows if the author is right about how the market might be likely to respond to any exceptionally large interest rate rise from Bank of England (BoE) this Thursday.

The Bank of Canada increases policy interest rate by 75 basis points to 3.25%, but it is becoming increasingly clear it is ready to slowdown its pace of hikes.