A leading Canadian lender and commercial bank says the Canadian Dollar will strengthen against the Pound and Euro over the duration of 2023, ensuring a recent trend of appreciation proves short-lived.

The Pound to Canadian Dollar exchange rate outlook has improved further in recent trade and Sterling could now have scope to reach some of its strongest levels since the end of the first quarter after establishing a foothold above the 1.57 handle last week, according to technical analysis from Scotiabank.

GBP/CAD technicals suggest further upside.

The Canadian Dollar is forecast to see further near-term weakness against the Pound, Dollar and Euro but a strong recovery through 2023 is predicted by NBC.

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.

CAD is forecast to fall against the Pound from year-end through to the third quarter of 2023 as the economy enters recession, according to Desjardins Bank.

"It is difficult to see the light in the tunnel for GBP," says Swedbank.

Economists at NBC have updated clients with their latest Canadian Dollar forecasts.

CAD is tipped to maintain that outperformance over coming weeks, but by year-end it should start retreating against GBP and EUR.

The Pound to Canadian Dollar exchange rate reached one month highs last week but may get an opportunity to advance closer toward the 1.57 handle in the days ahead if the U.S. Dollar remains soft or the Bank of England (BoE) surprises on the upside of market expectations this Thursday.

"In the global pecking order, CAD is the 2nd best performing G10 currency on the year, and we think Canada's currency fundamentals justify that"

The Canadian Dollar has been volatile with the Loonie whipsawing almost wildly since the Bank of Canada (BoC) shocked the market with its largest interest rate rise since 1998, throwing a curveball at investors and prompting a range of responses from analysts, a selection of which is included below. 

Quebec based Desjardins Bank are forecasting a steady decline in the value of the Canadian Dollar through the remainder of 2022.

The Pound to Canadian Dollar exchange rate may be in the process of attempting to reverse a steep multi-month decline but it has so far been stymied by technical resistance around 1.5932 on the charts and may now be likely to consolidate its recent gains near the 1.58 handle in the week ahead

"In a calm FX market, we think CAD would be king" - BMO Capital.

One of Canada's biggest banks believes a bout of Canadian Dollar strength looms and all that is required to trigger it would be a stabilisation in global equity markets.

The Canadian Dollar has remained an outperformer thus far in 2022 but its elevation and the factors underlying it are also the green shooting roots of an eventual downfall, according to CIBC Capital Markets, while TD Securities says that upside risks are dominant for USD/CAD in the short-term. 

Bank of America have looked at the data and it would seem selling the Canadian Dollar and Australian Dollar on a Friday is offering consistent returns.

GBP/CAD plumbing lowest since September 2019, could remain suppressed near 1.6200 short-term.

Foreign exchange strategists at Goldman Sachs are sticking with the Canadian Dollar, expecting it to outperform most rivals over coming weeks.