Some say Canadian Dollar Overstretched on BoC Trade, But Charts Beg to Differ

After a strong month CAD could be over extended, says JP Morgan's Daniel P. Hui

The Pound to Canadian Dollar pair is now firmly in a downtrend as the Bank of Canada (BOC) moves closer to raising interest rates whilst the Bank of England (BOE) remains divided and Sterling undermined by Brexititus.

In a widely-expected move the Bank of Canada has raised its basic interest rate by 0.25% to take the overall rate to 0.75% ensuring the Canadian Dollar remains one of the best-performing currencies in global FX.

The Pound to Canadian Dollar has fallen from 1.7800 highs set in May to its current 1.6688 level driven by increased expectations that the Bank of Canada (BOC) might start to tighten monetary policy, which has helped strengthen the Canadian part of the pairing.

Canadian employment report boosts CAD after showing gains in June.

The Canadian Dollar is likely to rise as a result of recent hawkish commentary from Bank of Canada (BOC), however, the big question is whether it can hold onto those gains.

The Pound has pushed higher against the Canadian Dollar despite recent commentary from the governor of the Bank of Canada (BOC) which supported the Canadian Dollar.

The US Dollar to Canadian Dollar pair fell to new yearly lows of 1.2963 on Friday after Canadian GDP data surprised to the upside, solidifying expectations that the Canadian central bank is about to embark on an interest rate hiking cycle.